Wyndham Worldwide (WYN) is becoming one of my favorite stocks this year - buying each dip has been very lucrative. Unlike many names it actually pulls back relatively sharply and then bounces, which is perfect for the way we trade around a core position in a stock. After an upgrade in late September by Goldman, we have another upgrade today (from Goldman again?!)- pushing the stock up over 9%. I am going to sell 60% of the position at $17.75 and we'll keep trying to continue this pattern - buy the dips, sell the rips. Even here, it is *still* cheap - hope it doesn't run away on us.
- A move away from timeshare business and an ongoing shift toward a fee-for-service structure prompted a Goldman Sachs analyst to upgrade Wyndham Worldwide Corp. Wednesday.
- Analyst Steven Kent said in a client note that he recently met with Wydham's management and determined that they are concentrating on selling off existing timeshare inventory and managing the sale of timeshares, condos and apartments as timeshare weeks without taking on more capital exposure.
- Over the next several quarters we expect Wyndham to continue to push itself towards becoming a fee-for-service company while in the meantime, generating significant cash flow as it moderates its timeshare development activities, he wrote.
- Kent raised his rating on the Parsippany, N.J.-based company to Buy from Neutral and increased his share price target to $26 from $18.
This is good news - the timeshare business has dragged their multiple down versus peers.
We bought 600 shares on 10/2 at $15.55 so employing last in, first out accounting effectively we just punted those shares for a 14% gain in about a week. We'll try to get these shares back at $16.50 or lower in the coming weeks. The stock has broken out of a long base today so there is certainly a chance it will just keep running from here - never know.
Hotels as the new paradigm? Who knew.
Long Wyndham Worldwide in fund; no personal position