Another Trade For My ‘Return To Normal’ Theme As Holiday Travel Picks Up
An important investment theme right now is the return to normalcy that we’re experiencing. There are still many parts of life that are far from normal, and we’re establishing new normals for other aspects. But most of us seem to be pushing more and more toward the way we were in 2019.
I’ve talked about this idea recently, including what that means for investors and traders. But today, I want to touch on a different angle.
We are doing more of the things we did two years ago, even if we are doing them differently. For example, data from the Transportation Security Agency (TSA) shows this. The chart below shows the number of people being screened by TSA at airports around the country.
Source: TSA
This is an interesting data set. Before the pandemic hit, 2020 was ahead of the 2019 pace. The economy was growing, and it could have been a great year. But numbers plummeted as plans were put on hold in March. As of July 2021, we are again coming close to getting back to normal.
It’s not a perfect data set. It can include crew members and people who work in parts of the airports. But the blue line that represents screening activity in 2021 is near its 2019 levels. Passenger screening has consistently been about 21% of the 2019 level for the past four months.
I believe this shows that people want to travel and are taking more trips. It will be interesting to see the numbers for the next few weeks with the Thanksgiving holiday. That’s historically one of the busiest travel times of the year. We may see exactly what the new normal at airports looks like then.
The next few weeks may also show many of us what the new normal for family gatherings looks like. We will gain insights into how shopping will be in the post-pandemic world. After that, it’s possible schools will even return to a normal environment one day.
How Investors Can Profit
All these changes will affect the stock market. But the most obvious way is through stocks that will benefit from the trends in travel. And that’s why I recently told my subscribers about a trade we can make in Expedia Group, Inc. (Nasdaq: EXPE).
The company recently issued its quarterly Travel Recovery Trend Report. The report combines Expedia Group first-party data and custom research to provide actionable insights to help travel marketers on their continued road to recovery. It can also help investors.
In a summary, the report notes…
While the travel industry experienced ups and downs throughout Q3, we continued to see positive trends and overall progress on the road to recovery. The rise in business travel demand and double-digit year-over-year increases in holiday season travel searches are just two of the trends that signal growing traveler confidence and industry improvements.
Highlights of the report include:
- Global search volumes held steady as border restrictions were lifted. For example, during the week of September 20, after the White House announced it would soon lift travel restrictions on international visitors to the United States who are vaccinated, searches from Europe, the Middle East, and Africa increased by 95% compared to the previous week.
- Search windows were shorter as travelers preferred to book last minute. Nearly 70% of global searches fell within a 0- to 30-day search window. People seem to want to travel immediately when they have the chance.
- Searches for winter holiday season travel were up sharply compared to 2020. Compared to the same period in 2020, searches for trips starting in November and December saw triple-digit growth.
- Business travel demand was on the rise as offices started to reopen. Business travel demand in the quarter was up more than 40% quarter over quarter and up more than 110% compared to the same three months in 2020.
While many travel companies can benefit from these trends, EXPE can benefit from all aspects of increased travel since it profits from searches through ads and bookings through commissions.
A Better Way To Trade
EXPE offers long-term potential, and investors who buy the stock at these levels have a good chance for gains. But over at my premium Income Trader service, my subscribers and I have a better plan…
I recently recommended a short-term trade on EXPE that will allow us to get paid instantly. And it’s all thanks to my award-winning ITV indicator (think of it as a volatility gauge, like the VIX, — except for individual stocks). As you can see in the chart below, the ITV (red) has crossed below the moving average (blue), meaning EXPE is on an ITV “buy” signal.
If all goes according to plan, we’ll make about 4.3% on our capital in 66 days or less. And because this is a short-term trade, we can turn right around and make a similar trade again for even more income.
I believe trading this way is one of the best ways to protect and preserve your capital in an uncertain market like the one we’re in now. It’s easy to learn, and you’ll generate far more income than you ever thought possible. In fact, you could easily generate thousands of dollars per month trading this way.