The leisure industry is widely diversified in nature and comprises companies that provide recreational products and services such as swimming pools, golf courses, boats, outdoor spaces, cruises, hotels and gaming services.

The leisure industry as a whole is likely to have benefited from steady rise in wages, lower unemployment, and upbeat consumer confidence. Apart from higher personal expenditure, increased demand for leisure products and services has been driving the leisure industry.

Furthermore, the boating market has been witnessing robust demand and the trend is likely to continue in the near term. According to National Marine Manufacturers Association, the boat manufacturers are continuously increasing production to support high demand. Demand for powerboats, including small sterndrive, wakeboard boats and smaller fiberglass boats with jet technology, have been rapidly rising.

Moreover, gaming industry in fourth-quarter 2019 is likely to have benefited from Improving tourism in Las Vegas and rising demand for gaming and leisure. Moreover, legalization of sports betting outside Nevada is likely to have bolstered the industry. However, Macau, the world’s largest gambling hub, has been disappointing investors as the region’s Casino gross gaming revenue (GGR) has been on the decline. Slowdown in China, tighter visa policies, political unrest and a smoking ban on mass-market gaming floors remained concerns.

How to Make the Right Pick?

Based on the abovementioned positives, it would be a good idea to add leisure stocks with the potential of reporting better-than-expected earnings in fourth-quarter 2019 to one’s portfolio.

Nonetheless, given the wide range of companies in this space, the task is by no means easy. While it is impossible to be sure of the outperformers, our proprietary methodology — a positive Earnings ESP along with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.

Our Choices

Here are a few leisure companies that investors can take a look at.

SeaWorld Entertainment, Inc. (SEAS - Free Report) will report fourth-quarter 2019 results on Feb 26. It has an Earnings ESP of +104.17% and a Zacks Rank #3. Further, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at 2 cents, suggesting growth of 200% from the prior-year quarter. 

SeaWorld Entertainment, Inc. Price and EPS Surprise

(Click on image to enlarge)

SeaWorld Entertainment, Inc. price-eps-surprise | SeaWorld Entertainment, Inc. Quote

Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) is scheduled to report fourth-quarter 2019 results on Feb 20. It has an Earnings ESP of +0.41% and a Zacks Rank #3. Also, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at 70 cents, suggesting a decline of 17.7% from the prior-year quarter. The company’s earnings have surpassed the consensus estimate in the trailing four quarters by 7.9%, on average.

Norwegian Cruise Line Holdings Ltd. Price and EPS Surprise

(Click on image to enlarge)

Norwegian Cruise Line Holdings Ltd. price-eps-surprise | Norwegian Cruise Line Holdings Ltd. Quote

Boyd Gaming Corporation (BYD - Free Report) is scheduled to report fourth-quarter 2019 results on Feb 20. The company has a Zacks Rank #3 and an Earnings ESP of +7.42%. Moreover, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at 47 cents, indicating an improvement of 46.9% from the year-ago quarter.

Boyd Gaming Corporation Price and EPS Surprise

(Click on image to enlarge)

Boyd Gaming Corporation price-eps-surprise | Boyd Gaming Corporation Quote

Melco Resorts & Entertainment Limited (MLCO - Free Report) will report fourth-quarter 2019 results. The company has a Zacks Rank #3 and an Earnings ESP of +11.34%. Moreover, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at 32 cents, indicating an improvement of 3.23% from the year-ago quarter.

Melco Resorts & Entertainment Limited Price and EPS Surprise

(Click on image to enlarge)

Melco Resorts & Entertainment Limited price-eps-surprise | Melco Resorts & Entertainment Limited Quote