Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Should I Buy InterContinental Hotels Group PLC (IHG)?

Page 1 of 2

LONDON — It’s time to go shopping for shares again, but where to start? There are loads of great stocks to choose from, and I’ve got my wallet out. So here’s the question I’m asking right now. Should I buy InterContinental Hotels Group PLC (ADR) (LSE:IHG) (NYSE:IHG)?

Checking in
One of my broker contacts has been getting very excited about InterContinental Hotels Group. He thought it was a great way to play the U.S. recovery, claiming the current low supply of hotels gives plenty of scope for growth in total revenues per available room (RevPAR), the key measure of industry success. As the global economy recovers, the business travel market should rebound, helping to fill up those rooms. Is he right? And if so, should I buy this share?

InterContinental Hotels Group PLC (ADR) (NYSE:IHG)Traveling light
InterContinental boasts more than 4,500 hotels in nearly 100 countries ,with a total of 672,000 rooms. Every year, 153 million people spend a night in one of its nine brands, which include Holiday Inn, Crowne Plaza, and, naturally, InterContinental. Yet the group physically owns a mere handful of those hotels, having sold the rest and signed long-term management or leasing contracts with the owners. Instead, it sells its expertise in-house management, systems, and marketing to these hotels. Its “asset light” strategy means there is a lot less capital-intensive baggage for investors to carry, and a lot more cash to count.

RevPAR for the course
Not that investors have been worrying lately. The share price is up 24% over the past three months to 18.96 pounds, helped by a reassuring Q3 2012 update, which showed strong RevPAR growth across all its key markets, and in the U.S. and China in particular. InterContinental has opened nine hotels with a total of 2,704 rooms in Greater China in Q3 alone. Group revenue rose between 1% and 3%, adjusted for currency movements, while operating profit rose 9% to $167 million. Group net debt fell to $472 million, from $644 million in 2011. The group’s global diversification has been a big help, sparing it restless nights in Europe. In fact, InterContinental is one of those businesses that have benefited from the recession, as a shortage of business finance has made it tricky for smaller rivals to borrow the funds they need to compete.

Page 1 of 2

Biotech Insider Alert - $5 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!