2 Top Summer Travel Stocks To Buy Now

With more than half of the U.S.’ adult population now vaccinated for COVID-19, many Americans are expected to travel  this summer. 

While Americans are expected to travel domestically primarily this year, a 47% spike in trans-Atlantic airfare searches indicates that people are interested in travelling to European cities also.

Yellow and White Bus on Road

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The pent-up demand for travel should benefit travel companies Winnebago Industries, Inc. and Travelzoo with summer kicking in. So, we think these stocks could be solid bets now.

Winnebago Industries, Inc. (WGO)

With multiple facilities in Iowa, Indiana, Minnesota and Florida, WGO is a manufacturer of outdoor lifestyle products used primarily in leisure travel and outdoor recreation activities. The company builds quality motorhomes, travel trailers, fifth wheel products and boats and operates under the Winnebago, Grand Design, Chris-Craft, and Newmar brands.

WGO’s revenue grew 34% year-over-year to $839.9 million in its fiscal second quarter, ended February 27. Its gross profit increased 96.3% year-over-year to $156.6 million for this period. It reported a 237.3% increase in operating income from the year-ago value to $100 million. Its net income increased 300% year-over-year to $69.1 million, and its  EPS came in at $2.12, representing a 216.4% increase from the prior-year quarter.

Analysts expect WGO’s revenue to increase 142.5% year-over-year to $839.42 million in the current quarter, ended May 2021. The company’s EPS is expected to increase 776.9% year-over-year to $1.76 in the same period. The stock has gained 16.7% over the past year.

WGO’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting. The stock is rated an A for Growth, and a B for Momentum. Within the Auto & Vehicle Manufacturers industry, it is ranked #20 of 57 stocks.

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