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SVN, WYN, HMIN, CHH, WOLF, OEH, Hotels - Motels Stocks Overvalued

^{Published on 2011-04-12 04:51:45 - WOPRAI}
 

April 12, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Hotels - Motels sector and these stocks are the most undervalued as of today. 7 DAYS GROUP HOLDINGS LT-ADR (NYSE:SVN), WYNDHAM WORLDWIDE CORP (NYSE:WYN), HOME INNS & HOTELS MANAG-ADR (NASDAQ:HMIN), CHOICE HOTELS INTL INC (NYSE:CHH), GREAT WOLF RESORTS INC (NASDAQ:WOLF), ORIENT EXPRESS HOTELS LTD -A (NYSE:OEH) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     SVN        7 DAYS GROUP HOLDINGS LT-ADR        $22.50         $19.35         20.70% Overvalued           Hotels - Motels        
     WYN        WYNDHAM WORLDWIDE CORP              $31.35         $24.48         20.70% Overvalued           Hotels - Motels        
     HMIN       HOME INNS & HOTELS MANAG-ADR        $42.22         $40.96         20.70% Overvalued           Hotels - Motels        
     CHH        CHOICE HOTELS INTL INC              $38.49         $31.63         20.70% Overvalued           Hotels - Motels        
     WOLF       GREAT WOLF RESORTS INC              $2.12          $1.49          20.70% Overvalued           Hotels - Motels        
     OEH        ORIENT EXPRESS HOTELS LTD -A        $11.60         $7.67          20.70% Overvalued           Hotels - Motels        

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

7 DAYS GROUP HOLDINGS LT-ADR (NYSE:SVN) - 7 Days Group Holdings Limited and its subsidiaries operate limited service economy hotels under the brand name of 7 Days Inn in the Peoples Republic of China. The company provides accommodations and services primarily to business and leisure travelers. As of June 30, 2010, it operated 399 hotels consisting of 257 leased-and-operated hotels and 142 managed hotels representing a total of 39,561 rooms covering 62 cities. The company was founded in 2004 and is headquartered in Guangzhou, the Peoples Republic of China.

WYNDHAM WORLDWIDE CORP (NYSE:WYN) - Wyndham Worldwide Corporation, together with its subsidiaries, provides various hospitality products and services to individual consumers and business customers in the United States and internationally. It offers its products and services under the Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Howard Johnson, Wyndham Rewards, Wingate by Wyndham, Microtel, RCI, The Registry Collection, ResortQuest, Landal GreenParks, Novasol, Hoseasons, cottages4you, James Villa Holidays, Wyndham Vacation Resorts, and WorldMark by Wyndham brand names. The companys Lodging segment franchises hotels in the upscale, midscale, economy, and extended stay markets of the lodging industry, as well as provides hotel management services for full-service hotels. Its Vacation Exchange and Rentals segment provides vacation exchange products and services, as well as access to distribution systems and networks to resort developers and owners of intervals of vacation ownership interests (VOIs); and markets vacation rental properties primarily on behalf of independent owners, vacation ownership developers, and other hospitality providers. Wyndham Worldwide Corporations Vacation Ownership segment develops and markets VOIs to individual consumers; and provides consumer financing in connection with the sale of VOIs, as well as offers property management services at resorts. The company is headquartered in Parsippany, New Jersey.

HOME INNS & HOTELS MANAG-ADR (NASDAQ:HMIN) - Home Inns & Hotels Management Inc. engages in the development, lease, operation, franchise, and management of a chain of economy hotels in the Peoples Republic of China. The company operates its hotels under the Home Inn brand name. As of June 30, 2010, it operated 674 hotels in 126 cities in China, of which 390 were leased-and-operated hotels, and 284 were franchised-and-managed hotels. The company was incorporated in 2001 and is headquartered in Shanghai, the Peoples Republic of China.

CHOICE HOTELS INTL INC (NYSE:CHH) - Choice Hotels International, Inc. and subsidiaries operate as a hotel franchisor worldwide. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria Suites, and Ascend Collection. As of December 31, 2009, it operated 6,021 open hotels representing 487,410 rooms; and 843 hotels representing 66,585 rooms under construction, awaiting conversion, or approved for development in 49 states, the District of Columbia; and 40 countries and other territories. It was formerly known as Choice Hotels Franchising, Inc. and changed its name to Choice Hotels International, Inc. The company was founded in 1981 and is based in Silver Spring, Maryland.

GREAT WOLF RESORTS INC (NASDAQ:WOLF) - Great Wolf Resorts, Inc., together with its subsidiaries, operates as a family entertainment resort company in North America. It owns, licenses, operates, and develops family resorts featuring indoor waterparks and family-oriented entertainment activities. The companys resorts features a combination of amenities, including themed restaurants, ice cream shop and confectionery, full-service adult spa, kid spa, game arcade, gift shop, miniature golf, interactive game attraction, family tech center, and meeting space. It operates and licenses its resorts under the Great Wolf Lodge and Blue Harbor Resort brand names. As of December 31, 2009, the company operated 11 Great Wolf Lodge resorts and 1 Blue Harbor resort located in Wisconsin Dells, Wisconsin; Sandusky, Ohio; Traverse City, Michigan; Kansas City, Kansas; Sheboygan, Wisconsin; Williamsburg, Virginia; Pocono Mountains, Pennsylvania; Niagara Falls, Ontario; Mason, Ohio; Grapevine, Texas; Grand Mound, Washington; and Concord, North Carolina. Great Wolf Resorts, Inc. was founded in 1992 and is headquartered in Madison, Wisconsin.

ORIENT EXPRESS HOTELS LTD -A (NYSE:OEH) - Orient-Express Hotels Ltd. and its subsidiaries operate principally in the leisure hospitality market. It owns and invests in individual deluxe hotels, restaurants, tourist trains, and river/canal cruise businesses. As of January 31, 2010, the company owned and managed 50 luxury hotel, restaurant, tourist train, and river cruise properties in 24 countries. It also engages in the real estate and residential property development. Orient-Express Hotels was founded in 1976 and is based in Hamilton, Bermuda.

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