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Bear of the Day: Hilton Grand Vacations (HGV)

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 Days like last Friday can make investors very complacent. Stocks go up, and it seems like any investment you make is a sure thing. The reality of the situation is that stocks can go down. You can lose your shirt betting on the wrong horse. Companies which have weak earnings trends are stocks to avoid in any market. The false sense of hope we are getting in the current bull market can lead some investors into a sense of security. That could be an error which proves itself to be very costly in the long run.

Today’s Bear of the Day is a stock with a weak earnings trend. That means, analysts have dropped their earnings estimates. I’m talking about Hilton Grand Vacations (HGV - Free Report) . Hilton Grand Vacations Inc., a timeshare company, develops, markets, and operates vacation ownership resorts primarily under the Hilton Grand Vacations brand. The company operates in two segments, Real Estate Sales and Financing; and Resort Operations and Club Management. It sells vacation ownership intervals; manages resorts; operates a points-based vacation club; and finances and services loans provided to consumers for their timeshare purchases. The company also manages and operates the points-based Hilton Grand Vacations Club and Hilton Club exchange programs, which provide exchange, leisure travel, and reservation services to approximately 326,000 members, as well as engages in the rental of inventory made available due to ownership exchanges through its club programs.

The Hotels and Motels industry ranks in the Bottom 5% of our Zacks Industry Rank. The reason for the unfavorable Zacks Rank is the negative earnings estimate revisions coming from analysts. Over the last sixty days, the Zacks Consensus Estimate for the current year has plummeted from 14 cents earnings per share to a loss of 47 cents. Next year’s number has dipped from $2.08 to $1.99. Obviously, optimism for next year is everywhere.

Hilton Grand Vacations is a Zacks Rank #4 (Sell). The highest ranking any stock in the Hotels and Motels industry is a Zacks Rank # 3 (Hold). Among those companies, Civeo (CVEO - Free Report) and Extended Stay America are both Zacks Rank #3 (Hold).

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