Omicron setback is a buying opportunity for tourism stocks, investor says

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  • SpringOwl Asset Management says the decline in travel stocks due to Omicron presents an attractive buying opportunity.
  • CEO Jason Eder said his company is most optimistic on casino stocks, particularly within Macau.
  • The sector has been badly hit by the ongoing travel restrictions and regulatory challenges.

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The fall in travel stocks following the emergence of a new COVID-19 variant is a temporary “setback” that presents some attractive buying opportunities within the sector, according to investor SpringOwl Asset Management.

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Travel and tourism stocks were hit after the World Health Organization classified Omicron as “a type of concern”. Several countries also moved to reimpose border restrictions.

SpringOwl CEO Jason Eder said the immediate pullback is “not equivocal” with the discovery of a delta version in late 2020, but is likely to be short-lived, noting that he is bullish on global travel stocks.

It is always in the period when people are most concerned where you as an investor earn the most.
Jason Eder
CEO, SpringOwl Asset Management
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“It’s always the period where people are most concerned about where you make the most as an investor,” he told CNBC’s “Squawk Box Asia” on Tuesday.

“It may not happen as fast as expected, but it is coming. And the drop in stock prices certainly represents an interesting opportunity,” he said.

betting on casino

SpringOwl Asset Management is most bullish on casino stocks, particularly those in Macau. The island faced travel restrictions, especially for visitors from mainland China, as well as recent regulatory action.

“Macao gaming companies now — because of the pandemic, but also because of some potential changes in regulation — probably offer some of the best value in the stock market as a whole,” Eder said.

Eder said Las Vegas Sands, which owns and operates resorts and casinos throughout the US, Macau and Singapore, is particularly attractive. The stock, which closed Tuesday at about $35 a share, is down about 50% from its January 2020 levels.

“It’s at the top of my list right now,” Eder said, highlighting the company’s “strong balance sheet” that has been hit by travel and tourism right now.

“I think we’ll look back in a few years and wish we could buy more” when it was below $40, he said.

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