CNBC’s Jim Kramer on Monday highlighted six travel and leisure stocks that he believes are worth investing in because of their affordable price and growth potential.
“With [Federal Reserve] Harden [interest rates], The market prefers something called a reasonable price increase or GARP. In other words, you want companies to do better than the average growth rate as long as their stock prices are relatively cheap, ”said the host of“ Mad Money ”.
“Get used to the world according to GARP, okay? It’s an old, new way of investing,” he later added.
The Fed approved a 25 basis point interest rate hike in March, which is expected to be the first of several hikes this year to curb rising inflation. The minutes of the Fed’s March meeting, published April 6, indicate that the Fed may raise interest rates by 50 basis points at its next meeting. Fed officials also plan to shrink about $ 95 billion in balance sheets a month.
To bring a list of investment travel and leisure stocks, Kramer first ran a screen for companies in the S&P 500 that could double-digit earnings this year and next. Then, Kramer examines the Multiple or PEG ratio of earnings growth from the company’s value. “It’s a metric that tells you how much we’re willing to pay for a company’s growth rate. আমরা When we talk about a reasonable valuation, anything 1 or less will generally be considered cheap,” he said.
To reduce the list of companies using two metrics, Kramer had 51 names left.
“We’re going through our favorites every week,” Kramer said. He added that he believes the travel and leisure stocks he has chosen will “benefit from a great reopening, even if the Fed really does break the economy.”
Here are Kramer’s choices for six “GARP-iest” travel and leisure companies:
- Booking Holdings
- Marriott International
- Darden Restaurant
Disclosure: Owner of shares of Cramers Charitable Trust Disney.
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