Wall Street Re-Positions For “Higher-For-Longer" Stance

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Wall Street Re-Positions For “Higher-For-Longer" Stance Yesterday continued the repositioning among investors to account for a higher-for-longer Federal Reserve stance. Ten-year yields fell after briefly hitting 4.5% for the first time since 2007. Two-year rate also touched its highest level since 2006. This shows that traders expect higher rates for a while. The S&P 500 had its worst week since March. - “That’s starting to raise some eyebrows for investors,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. - “Investors are getting used to these higher rate levels and what that means for risk assets going forward.” Rising oil prices cement the fear that rates would stay higher. Governor Michelle Bowman pointed to higher gasoline prices as one of her concerns about inflation, saying that it could roll back some of the progress in inflation. - “I see a continued risk that energy prices could rise further and reverse some of the progress we have seen on inflation in recent months,” Bowman said. Governor Michelle Bowman JPMorgan Chase’s Christyan Malek said an energy “supercycle” could push Brent crude prices as high as $150 a barrel. He expects crude prices to range between $90 and $110 in 2024 before hitting as high as $150 by 2026. We will see whether these higher prices will affect September’s inflation numbers. And of course, investors are worried about a potential government shutdown. It has become a routine on Capitol Hill to play games. Wall Street isn’t too worried about it yet, but it could be a disaster for the economy. - “Investors are staring at the ground right now worried about a shutdown,” said Jamie Cox, managing partner at Harris Financial. “Markets are just sort of waiting around to see when it happens, and then trying to discount the duration of it.”  Top Undervalued Hotel Stock To Buy Right Now Today’s Stock Pick: Playa Hotels & Resorts NV ([PLYA]() When a CEO is literally yelling during the earnings call about how undervalued his company is, it is worthy a look, right? That’s what we have here with Playa Hotels & Resorts. An analyst asked the CEO if it is possible that Playa is trading far below its value because their hotel properties aren’t valued properly. Basically, all-inclusive resorts aren’t as liquid as your typical house. So their valuations don’t get updated as quickly. So, the analyst asked the CEO if he would consider selling off a small piece of its property just to establish a new valuation in its properties. The thesis is simple. You’d be saying to the market – “Hey, look at this asset. We sold it at x price, and that is above what you currently value our portfolio. Isn’t it time to re-rate these assets?” Nice, right? The CEO called it a solid idea academically but not as good as in real world. He viewed inefficient markets as an opportunity for Playa to add properties at a discount to their portfolios. And this is key. Playa has found a secret sauce to unlock even more valuation per property. (More on this later.) Sure enough, Playa bought about $41 million of its shares in the first quarter alone. And an additional $20 million so far in the 2nd quarter when the company hosted the earnings call. That was about 4% of its current market cap! - “We continue to believe that our stock provides a tremendous value relative to the fundamentals and share repurchases are a phenomenal use of capital for our free cash flow,” said CEO Bruce Wardinski. Indeed, Playa is a phenomenal value for your portfolio. Playa Hotels & Resorts is the owner, operator, manager and developer of all-inclusive resorts in prime beachfront locations – Pacific Coast, Cancun, Jamaica, and Dominican Republic. (Source: Playa Hotels & Resorts) Here’s the secret sauce behind Playa’s business. It partners with elite brands like Hyatt, Marriott, and Hilton to offer all-inclusive resorts. Its competitors don’t work with as prestigious brands as Playa does, giving them limited U.S. consumer recognition. (Source: Playa Hotels & Resorts) Offering all-inclusive makes a lot of sense for a business. Guests book and pay further in advance, offering more predictable revenue streams. Because its services are in one package, the hotel can prepare its resources better (in labor, etc.). If you offer fee-based hotels, you will have difficult time to anticipate demand. (Source: Playa Hotels & Resorts) Best of all, all-inclusive often offers best deals for consumers. They pay less in total if they consider all extra expenses they’ll have to pay if they stayed at a regular hotel. (Such as food, entertainment, etc.) For example, Playa estimates a 36% savings if consumers paid for an all-inclusive hotel. (Source: Playa Hotels & Resorts) Therefore, Playa can make a lot of money by buying a non-branded property and convert them into a branded one. Often, it brings an instant boost to demand and rates. Its Hyatt Ziva Cancun property brought a 35% Cash-on-Cash return since its opening date of 4th quarter in 2015. (Source: Playa Hotels & Resorts) And it wasn’t an unicorn project. Playa averaged about 34% cash on cash return from its conversion and expansion projects! (Source: Playa Hotels & Resorts) As a result, Playa is a money-making machine. It has the highest 4-year historical average for LTM adjusted EBITDA margins. It is a company that knows how to make money off its properties. (Source: Playa Hotels & Resorts) Bottom line: Playa Hotels & Resorts has a secret sauce to find undervalued properties and turn them into a cash cow. That’s the best kind of a business. And they hold an enormous competitive advantage in working with elite brands. You can simply buy this stock for its undervalued properties, and be confident that your money will be protected with a great upside. [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](       © All Rights Reserved, Trade Alliance If you no longer want to receive these messages, you may [click here]( to unsubscribe.