#7 - Choice Hotels International (NYSE:CHH)
Choice Hotels International (NYSE: CHH) has a short interest rate of 17.6%, and that short interest has been increasing for the past two quarters. That may seem odd since consumers continue to spend money on travel and travel-related expenses, such as hotels.
But the growth in Choice Hotels appears to be waning. The company has missed on revenue and earnings in the last two quarters. However, CHH stock is up 7.8% in 2024, and the company expects to grow earnings over 7% in the next 12 months.
This discrepancy could be a case of investors being ahead of analysts. The bullish case for Choice Hotels focuses on the company's portfolio, which includes properties at all budget levels. That diversity could be significant if consumers are looking to find more budget-friendly options.
On the other hand, there is evidence to show that it's the luxury consumer that continues to spend. That may mean that Choice Hotels will lose market share to premium hotel chains.
About Choice Hotels International
Choice Hotels International, Inc, together with its subsidiaries, operates as a hotel franchisor in the United States and internationally. It operates through Hotel Franchising & Management and Corporate & Other segments. The company franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Ascend Hotel Collection, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Studios, WoodSpring Suites, Everhome Suites, Cambria Hotels, Radisson Blu, Radisson RED, Radisson, Park Plaza, Country Inn & Suites by Radisson, Radisson Inn & Suites, Park Inn by Radisson, Radisson Individuals, and Radisson Collection.
Read More - Current Price
- $130.41
- Consensus Rating
- Reduce
- Ratings Breakdown
- 2 Buy Ratings, 6 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $125.64 (3.7% Downside)
As you can see, short interest is not, by itself, bullish or bearish. But, it can give investors a view into how analysts and institutional investors feel about a company. At that point, it's up to every investor to perform their own due diligence to understand if the high short interest is a temporary situation or an indication of a deeper problem with the company.
One of the potential consequences of high short interest is an event known as a short squeeze. This occurs when a large percentage of short sellers attempt to cover their shares (i.e., take profits) at the same time. This buying pressure can cause the share price to make a rapid move higher creating a short squeeze.
MarketBeat has a free tool that can help you track companies with high short interest. You'll find the Short Interest category under the Market Data tab. Click on Largest Short Interest to see the stocks with the highest short interest in terms of percentage.
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