Why Unusual Options Volume for Park Hotels & Resorts Intrigues Onlookers

While the COVID-19 crisis imposed an unprecedented headwind against the broader travel industry, optimistically aligned rumblings in the derivates market for Park Hotels & Resorts (US:PK) may bode well not just for the underlying enterprise but the sector at large. Combining relatively strong financial performances with a favorable fundamental backdrop, PK stock appears ready to reverse prior losses.

Mainly, the operational numbers from Park Hotels’ first quarter of 2023 earnings report, announced on May 1, speak for themselves. On the top line, total revenue came out to $648 million, a sharp increase of 35% against the year-ago quarter’s result of $479 million.

As well, the company printed operating income of $80 million in the most recent quarter, leading to net income of $33 million. In contrast, the company could only muster operating income of $1 million in Q1 2022, resulting in a net loss of $56 million.

In terms of per-share profitability, Tysons, Virginia-based Park Hotels delivered earnings per share of 15 cents. This tally compares very favorably to a loss of 24 cents per share one year ago.

Significantly, every operational aspect of Park Hotels — which is structured as a real estate investment trust (REIT) — enjoyed a significant leg up on a year-over-year basis. Primarily, sales from room rentals hit $382 million, 30.8% above the $292 million posted in Q1 2022. Also, the food and beverage segment rang up $181 million or 64.5% above the $110 million posted a year ago.

Also, the units labeled “ancillary hotel” and “other” generated $65 million and $20 million in sales, respectively. These figures beat out the year-ago-quarter’s results of $61 million and $16 million.

Optimistic Indications

Following the close of the May 10 session, PK stock stuck out on Fintel’s screener for unusual stock options volume. Specifically, call volume hit 5,336 contracts against an open interest reading of 3,261. Typically, the average call volume reaches only 79 contracts.

On the other side of the equation, put volume landed at a comparatively diminutive 87 contracts against open interest of 1,945. Usually, put volume reaches 77 contracts.

Notably, the put/call ratio for PK stock at time of writing sits at 0.57. Since calls (the denominator) represent bullish wagers, ratios less than one indicate optimistic sentiment. Better yet, the enthusiasm for Park Hotels and similar travel-oriented enterprises enjoys fundamental justification.

Travel Booms

The summer travel boom that materialized last summer continued to extend into the holidays, The Wall Street Journal reported in November. Indeed, NBCUniversal theme parks — owned by Comcast (US:CMCSA) — commanded packed crowds, leading to the theme parks’ then-CEO Jeff Shell to remark that the dynamic “…kind of defies logic a little bit.”

Heading into 2023’s summer travel season, CNBC — citing data from Morning Consult — reported that more than half of American Generation Z adults represent frequent travelers. Moreover, despite this age cohort lacking the income and spending power of older generations, young consumers under this category prioritize traveling.

Since the start of this year, PK stock gained nearly 16% of equity value. Just in the past five sessions through May 10, it returned more than 7% to shareholders.

This article originally appeared on Fintel

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