Hotel Takeover Targets

Description:

Its very bullish for investors that Blackstone (BX) is buying HLT for $47 in cash. For one thing, that values HLT at 16x EBITDA (in other words, 16 times, roughly, cash flows). Over the past year deals have been more likely to occur at 10-12x EBITDA. The higher the multiple, the more difficult it is for the buyout firm (in this case Blackstone) to pay down the debt they take on to make the purchase. The fact that this deal, a $26 billion deal, is occurring at 16x shows that private equity firms are willing to bear additional risk to win deals. Who benefits? Public stockholders. Lets not forget there is $1 trillion dollars that needs to be put to work.

With HLT being bought it makes sense to look at the other hotel companies with good balance sheets, decent earnings growth, that are trading for less than 15x cash flows. These are all now buyout candidates.

Most Viewed Portfolios

View All

Articles

4 Big Stocks Getting Big Attention

07.25.14 | 02:59 PM

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generat...

3 Huge Stocks on Traders' Radars

07.25.14 | 03:01 PM

BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating ...

More Articles
blog comments powered by Disqus
brokerage partners
connect with Stockpickr
Fan us on FaceBook
Follow us on Twitter