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Four Reasons to Check In With Marriott

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It's hard to ignore the news that the hotel giant reinstated a cash dividend.

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Let's hope for a little bit of a bounce-back today.

Asian stocks got pummeled big time overnight. The Hang Seng and the Nikkei were off 3.33% and 2.89%, respectively. European stocks were in the red early this morning, too. And here in the US, we're currently trading lower.

Here's what I'm focused on this fine Friday morning (besides the weather reports warning of an impending snow storm, and of course, the upcoming weekend):

Marriott International
(MAR):
I'm not a big fan of airline or hotel stocks right now and haven't been for some time because, no matter what some would like you to believe, this recovery will be spotty and Americans aren't going to be traveling in volumes or spending money on expensive getaways soon. However, it was hard to ignore news yesterday that the hotel giant reinstated a cash dividend.

Some thoughts:

1.
This isn't something a board would do unless it were optimistic that better times could be ahead.

2. If I were looking to belly up to a company in this space, this would probably be the one. After all, it isn't some newbie, and it's got a big footprint, which might help mitigate some of the risk associated with a sluggish economy in the US. Plus, given all the other choices, I think that Marriott is among the most likely to be able to weather this lingering economic storm.

3.
The estimate for 2010 has gone up a smidge in the past month or so.

4. All that said (and don't hate me, Marriott bulls), I'd much rather wait for a bit of a pullback. As I've said in previous articles, this market scares me, and I think the stock is fairly valued now based upon the 2010 estimate.

Gap (GPS):
Citi upped the company's rating to Buy.

While I'm hardly jumping up and down about the near-term prospect for mall-based stores, I must admit that Gap scratches me where I itch. Not only has the stock shown some signs of life despite a tough environment, but the earnings outlook seems pretty strong, too. Note that estimates for this year have been moving up. I think the stock could very well trade to the mid-$20 level within a year or so.

Dollar Tree (DLTR):
Justin Sharon points out in his article this morning that JPMorgan cut its rating to Neutral.

I'm still excited about the discounters and deep discounters and feel that we're still in the middle innings of their potential run.

The earnings outlook for this year and next year, and the expected growth from this year to next year is more than a little intriguing to me. That said, I don't think the cut is going to bode well for the stock in today's session, and the lousy market could put a lid on it, too. But hey, a pullback to the mid-$40s could be a good opportunity.

Coach (COH):
Justin Sharon also points out that Goldman cut the high-end purse people to Neutral.

The stock has held up remarkably well in this very difficult environment, which is commendable. And I have little doubt that Coach will be seriously ringing the register as the recovery advances. But I think it's pretty fairly valued right now at almost 16 times this year's estimate. If it were to dip below $30, however, I might change my tune. But as of right now, I'm taking a big pass.

Incidentally, I don't think the downgrade will bode well for the stock in today's session.

Have a great day and an even better weekend! Enjoy the snow if you're on its radar!
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No positions in stocks mentioned.

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