Mueller made his comments at the Montgomery Securities 27th Annual Investment Conference, the largest annual investment conference devoted exclusively to growth stocks, which is running now through September 26. More than 1,000 institutional investors are attending the conference, which features 235 growth companies and 25 analyst-led workshops. Mueller detailed for investors the favorable conditions currently affecting the lodging and timeshare industries. As a result, room rate growth has exceeded inflation since 1994.
Demand is up as a result of the healthy economy and increased business and leisure travel.
Hotel operators can buy these hotels at attractive prices that are less than the cost of building a new hotel from scratch, and the hotels then generate high returns after the repositioning is completed. Mueller's stock choice in this segment is La Quinta, which just finished remodeling its entire chain this spring. Mueller said consumers perceive timeshares as a good value, and the exchange privileges that come along with the unit are seen as flexible and convenient. For timeshare operators, the industry offers excellent unit economics and the opportunity to earn additional profits by financing consumer purchases of the units. Mueller's recommended stocks in this area are Signature Resorts, Trendwest and Vistana, with Signature being the most rapidly growing company in the group.