10 Best Leisure Stocks To Buy Now

In this article, we discuss 10 best leisure stocks to buy now.

The leisure industry is evolving rapidly, and people now look forward to more than travel and staycations to spend their vacations or free time. Some of the trends shaping the leisure industry in 2022 include interactive educational activities, personalized experiences through mass customization, AI that supports contactless payments and social distancing, technological ecosystems, machine learning and data insights for improved experiences, and gamification, augmented reality, and immersive experiences. Some of the top leisure companies in the world are pioneers of the transformation in this industry. 

Similarly, attitudes towards fitness and leisure across the world are shifting. The COVID-19 pandemic changed the fitness dynamic for a lot of people who never previously cared to exercise or venture out, and now they were going for daily walks and searching for different ways to get their fitness fix. This will significantly increase the demand for leisure and fitness centers in residential and commercial complexes. 

Between 2018 and 2060, the ratio of the American population aged 65 and older will increase from 15% to 24%, reflecting a potential boost in the future demand for different types of entertainment, leisure, and personal development. Some of the best leisure stocks to buy now include The Walt Disney Company (NYSE:DIS), Pool Corporation (NASDAQ:POOL), and Planet Fitness, Inc. (NYSE:PLNT). 

Our Methodology 

We selected the following leisure stocks based on positive analyst coverage, strong business fundamentals, and future growth prospects. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. 

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Best Leisure Stocks To Buy Now

10. Life Time Group Holdings, Inc. (NYSE:LTH)

Number of Hedge Fund Holders: 6

Life Time Group Holdings, Inc. (NYSE:LTH) is a Minnesota-based company that provides health, fitness, and wellness experiences in the United States and Canada. It engages in designing, building, and operating sports and athletic, professional fitness, family recreation, and spa centers in a resort-like environment. On November 9, Life Time Group Holdings, Inc. (NYSE:LTH) reported a ​​Q3 GAAP EPS of $0.12, beating market estimates by $0.22. For the fourth quarter of 2022, the company is projecting revenue to be in the range of $460 million to $490 million, versus a consensus of $479.69 million. 

On November 10, Oppenheimer analyst Brian Nagel maintained an Outperform rating on Life Time Group Holdings, Inc. (NYSE:LTH) but trimmed the price target on the shares to $33 from $40 following the Q3 results. With membership and dues trends at the company now tracking well, the analyst believes Life Time Group Holdings, Inc. (NYSE:LTH) is positioned well to focus more on optimizing expenses to offer higher margin expansion and profitability over the rest of 2022 and into 2023.

According to Insider Monkey’s data, 6 hedge funds were bullish on Life Time Group Holdings, Inc. (NYSE:LTH) at the end of Q3 2022, compared to 3 funds in the prior quarter. Leonard Green’s Leonard Green & Partners is the largest stakeholder of the company, with 58.7 million shares worth $572.7 million. 

Like The Walt Disney Company (NYSE:DIS), Pool Corporation (NASDAQ:POOL), and Planet Fitness, Inc. (NYSE:PLNT), Life Time Group Holdings, Inc. (NYSE:LTH) is one of the best leisure stocks to monitor. 

9. Cedar Fair, L.P. (NYSE:FUN)

Number of Hedge Fund Holders: 10

Cedar Fair, L.P. (NYSE:FUN) is an Ohio-based company that owns and operates amusement and water parks, and complementary resort facilities in the United States and Canada. Cedar Fair, L.P. (NYSE:FUN) is one of the premier leisure stocks to invest in. Record-breaking pace through October supports expectations that Cedar Fair, L.P. (NYSE:FUN) will achieve new all-time highs for net revenues and adjusted EBITDA in 2022. The company posted a Q3 GAAP EPS of $5.86, beating Wall Street estimates by $2.00. 

On November 2, Deutsche Bank analyst Chris Woronka maintained a Buy rating on Cedar Fair, L.P. (NYSE:FUN) but lowered the price target on the shares to $55 from $63. 2023 is most likely to represent “something of a normalization of park trends, not a new paradigm” in terms of maintaining or increasing per caps from historically resilient levels if attendance completely recovers to pre-COVID levels, the analyst told investors in a research note.

According to Insider Monkey’s data, 10 hedge funds were bullish on Cedar Fair, L.P. (NYSE:FUN) at the end of Q3 2022, compared to 12 funds in the prior quarter. Mark T. Gallogly’s Centerbridge Partners is the largest stakeholder of the company, with approximately 3 million shares worth $122 million. 

Miller Value Partners released its Q1 2020 investor letter and mentioned Cedar Fair, L.P. (NYSE:FUN). Here is what the firm said: 

“Theme park operator Cedar Fair (FUN) fell 66.15% during the period with travel and leisure stocks after President Trump restricted travel to the US and government agencies recommended the restriction of large crowds in response to COVID-19. That said, the company reported solid Q4 results with revenue of $257M and EBITDA of $54.6M, slightly below consensus of $267M and $64.7M, respectively, on one fewer week of operations Y/Y. On a same-week basis, revenue rose +13% Y/Y driven by a +16% increase in visits while out-of-park spend came in higher than expected at +9.1%. The long-term outlook remains intact with management noting early season sales are +40% (following the 50% increase in 3Q19). Management also introduced a new long-term EBITDA target of $600M by 2024 (3.5% compound annual growth rate (CAGR)). In addition, insiders including CEO Richard Zimmerman purchased over 50,000 shares totaling $1.97M.”

8. Manchester United plc (NYSE:MANU)

Number of Hedge Fund Holders: 14

Manchester United plc (NYSE:MANU) owns and operates a professional sports team in the United Kingdom. It operates Manchester United Football Club, a professional football team. Manchester United plc (NYSE:MANU) is one of the best leisure stocks to monitor. For the full year fiscal 2023, the company expects total revenues to be in a range of £580 million to £600 million and adjusted EBITDA to range from £100 million to £110 million. 

On November 23, after Manchester United’s owners announced that they are exploring strategic alternatives for the club, Jefferies analyst Randal Konik said he expects “a competitive process” and that he continues to believe that the club’s fundamentals and “significant global reach” merit a premium. He has a Buy rating and a $17 price target on Manchester United plc (NYSE:MANU) shares.

According to Insider Monkey’s data, 14 hedge funds were bullish on Manchester United plc (NYSE:MANU) at the end of the third quarter of 2022, compared to 16 funds in the prior quarter. John W. Rogers’ Ariel Investments is the biggest stakeholder of the company, with 11.4 million shares worth $151.60 million. 

Here is what East 72 Fund has to say about Manchester United plc (NYSE:MANU) in its Q3 2022 investor letter:

“So where does this leave the publicly traded MSGS? As we discuss with Manchester United (NYSE:MANU), whilst underpinned by positive economics, owning stock in the team is held back by a family controlled structure and past erratic attitudes towards the team(s). To some extent, the main (only?) investment thesis is a sale of the teams – a factor reflected in the share prices.

MSGS has only 24.77m shares issued trading at $136.66. As we discuss with MANU below, accounting in sports teams is arcane due to deferred revenues sat on the balance sheet often leading to upfront cash and hefty seasonality. Whilst MSGS net debt at $160million is low, on our estimates there is around $320m of negative working capital. Hence, the enterprise value for the two teams is around $3.8billion ($3.3bn equity + $480m “liabilities”). The combined Forbes valuations of the Knicks and Rangers is $7.8billion; if we take our liability figure off this, the debt free figure would be around $7.3billion. With “the Garden” separated, there may be a further discount, but the Forbes values lay 92% above the equity markets’ view. We have a small exposure, bought at very recent prices.”

7. Vista Outdoor Inc. (NYSE:VSTO)

Number of Hedge Fund Holders: 22

Vista Outdoor Inc. (NYSE:VSTO) is a Minnesota-based company that designs, manufactures, and markets consumer products in the outdoor sports and recreation markets in the United States and internationally. On November 2, Vista Outdoor Inc. (NYSE:VSTO) reported a FQ2 non-GAAP EPS of $1.71 and a revenue of $781.7 million, outperforming Wall Street estimates by $0.01 and $13.4 million, respectively. 

On November 7, Lake Street analyst Mark Smith maintained a Buy rating on Vista Outdoor Inc. (NYSE:VSTO) but lowered the price target on the shares to $45 from $53 after the company reported “mixed” Q2 results and lowered full-year guidance to reflect the lower sales and profitability outlook. While the analyst was “disappointed” by these results, he thinks Vista Outdoor Inc. (NYSE:VSTO) has a “diverse portfolio” and is seeing “different results across different families of products”.

According to Insider Monkey’s data, 22 hedge funds were long Vista Outdoor Inc. (NYSE:VSTO) at the end of September 2022, compared to 25 funds in the prior quarter. Jeffrey Gates’ Gates Capital Management is the largest stakeholder of the company, with 5.5 million shares worth $135.60 million. 

Here is what ClearBridge Investments has to say about Vista Outdoor Inc. (NYSE:VSTO) in its Q2 2021 investor letter:

“Our Strategy outperformed with strong results from consumer discretionary stocks like Vista Outdoor. Vista Outdoor, a manufacturer of a wide range of products serving the outdoor sports and recreation markets, also performed well in the period on continued demand and growing margins.”

6. Topgolf Callaway Brands Corp. (NYSE:MODG)

Number of Hedge Fund Holders: 26

Topgolf Callaway Brands Corp. (NYSE:MODG) is a California-based company that designs, manufactures, and commercializes golf equipment, golf and lifestyle apparel, and other accessories. It operates through three segments – Topgolf, Golf Equipment, and Apparel, Gear and Other. Topgolf Callaway Brands Corp. (NYSE:MODG) is one of the best leisure stocks to invest in. 

On November 3, Topgolf Callaway Brands Corp. (NYSE:MODG) reported a Q3 non-GAAP EPS of $0.23 and a revenue of $988.5 million, outperforming Wall Street estimates by $0.06 and $38.32 million, respectively. For full-year 2023, Topgolf Callaway Brands Corp. (NYSE:MODG) expects net revenues to grow approximately 10% year-over-year. 

JPMorgan analyst Kevin Heenan on October 26 maintained an Overweight rating on Topgolf Callaway Brands Corp. (NYSE:MODG) but trimmed the price target on the shares to $29 from $30. The analyst established 2023 price targets across the leisure sector ahead of the Q3 results.

According to the third quarter database of Insider Monkey, 26 hedge funds were long Topgolf Callaway Brands Corp. (NYSE:MODG), compared to 29 funds in the last quarter. Ken Fisher’s Fisher Asset Management held the biggest stake in the company, comprising 3.15 million shares worth $60.7 million. 

In addition to The Walt Disney Company (NYSE:DIS), Pool Corporation (NASDAQ:POOL), and Planet Fitness, Inc. (NYSE:PLNT), Topgolf Callaway Brands Corp. (NYSE:MODG) is one of the top leisure stocks backed by smart investors.

5. Six Flags Entertainment Corporation (NYSE:SIX)

Number of Hedge Fund Holders: 35

Six Flags Entertainment Corporation (NYSE:SIX) is a Texas-based company that owns and operates regional theme and waterparks under the Six Flags brand. The parks offer multiple thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues, and retail outlets. Six Flags Entertainment Corporation (NYSE:SIX) is one of the premier leisure stocks to buy now. 

On November 11, Deutsche Bank analyst Chris Woronka reiterated a Buy rating on Six Flags Entertainment Corporation (NYSE:SIX) but slashed the price target on the shares to $29 from $32. The analyst thinks of the Q3 results as a possible “trough.”

According to Insider Monkey’s Q3 data, 35 hedge funds were bullish on Six Flags Entertainment Corporation (NYSE:SIX), compared to 34 funds in the last quarter. Rehan Jaffer’s H Partners Management is the biggest stakeholder of the company, with 10.70 million shares worth $189.3 million. 

Here is what Merion Road Capital specifically said about Six Flags Entertainment Corporation (NYSE:SIX) in its Q3 2022 investor letter:

“I am actively looking for new ideas and started dipping my toe in Six Flags Entertainment Corporation (NYSE:SIX). SIX is another turnaround situation. Unlike PTON, SIX is backed by hard assets and has a history of stable earnings. New management is looking to grow EBITDA to $700mm vs. the $525mm range over the past several years, covid aside. Their strategy is to effectively reduce traffic and increase price, while prioritizing capital spend on high return projects. Results have admittingly been mixed so far. But even assuming no benefit from the new initiatives, the company is trading at a reasonable valuation of 11x EBIT.”

4. Planet Fitness, Inc. (NYSE:PLNT)

Number of Hedge Fund Holders: 39

Planet Fitness, Inc. (NYSE:PLNT) is a New Hampshire-based company that franchises and operates fitness centers under the Planet Fitness brand. The company operates through Franchise, Corporate-Owned Stores, and Equipment segments. Planet Fitness, Inc. (NYSE:PLNT) franchises are available in the United States, Puerto Rico, Canada, Panama, Mexico, and Australia. 

On November 8, Planet Fitness, Inc. (NYSE:PLNT) reported a Q3 non-GAAP EPS of $0.42 and a revenue of $244.39 million, outperforming Wall Street consensus by $0.04 and $9.82 million, respectively. Revenue over the period climbed 58.4% on a year-over-year basis. 

Raymond James analyst Joseph Altobello on November 16 raised the price target on Planet Fitness, Inc. (NYSE:PLNT) to $92 from $84 and kept a Strong Buy rating on the shares. The analyst had higher confidence in both Planet Fitness, Inc. (NYSE:PLNT)’s ability to execute on its business model and its competitive positioning, and told investors that the company introduced “ambitious yet achievable” three-year financial targets, including low-to-mid teens revenue growth.

According to Insider Monkey’s Q3 data, 39 hedge funds were long Planet Fitness, Inc. (NYSE:PLNT), compared to 28 funds in the prior quarter. Karthik Sarma’s SRS Investment Management is the leading position holder in the company, with approximately 7 million shares worth $401 million. 

Here is what Wasatch Global Investors has to say about Planet Fitness, Inc. (NYSE:PLNT) in its Q1 2021 investor letter:

“At the other end of the spectrum, we completely sold our position in Planet Fitness, Inc. (PLNT) even though some speculators would consider the stock to be a reopening play. The company owns and operates a chain of fitness clubs. The stock spiked on optimism that people will return to pre-pandemic levels of exercise at group facilities. But recent earnings for Planet Fitness didn’t impress us, and we decided the stock was too expensive based on our projection for the company’s growth rate.”

3. SeaWorld Entertainment, Inc. (NYSE:SEAS)

Number of Hedge Fund Holders: 39

SeaWorld Entertainment, Inc. (NYSE:SEAS) operates as a theme park and entertainment company in the United States. It operates a portfolio of theme parks under the SeaWorld, Busch Gardens, Aquatica, Discovery Cove, Water Country USA, Adventure Island, and Sesame Place brands. It is one of the best leisure stocks to monitor. 

Riley analyst Eric Wold on November 10 maintained a Buy rating on SeaWorld Entertainment, Inc. (NYSE:SEAS) but lowered the price target on the shares to $75 from $79. The company reported Q3 results that fell short of estimates on a delayed rebound in non-core attendance groups and ongoing inflationary and labor cost pressures, the analyst told investors. The analyst remains confident that non-core attendance will return but trimmed estimates following the third quarter.

According to Insider Monkey’s data, 39 hedge funds were bullish on SeaWorld Entertainment, Inc. (NYSE:SEAS) at the end of Q3 2022, compared to 35 funds in the prior quarter. Scott Ross’ Hill Path Capital held the largest stake in the company, comprising 27.20 million shares worth $1.2 billion. 

2. Pool Corporation (NASDAQ:POOL)

Number of Hedge Fund Holders: 42

Pool Corporation (NASDAQ:POOL) is a Louisiana-based company that distributes swimming pool supplies, equipment, and related leisure products in the United States and internationally. On October 27, Pool Corporation (NASDAQ:POOL) declared a quarterly dividend of $1 per share, in line with previous. The dividend was paid to shareholders on November 23. 

On October 24, investment advisory Deutsche Bank maintained a Hold rating on Pool Corporation (NASDAQ:POOL) but lowered the firm’s price target on the shares to $350 from $368 following the Q3 results. Analyst Joe Ahlersmeyer issued the ratings update. 

According to Insider Monkey’s third quarter database, 42 hedge funds held stakes worth $1.29 billion in Pool Corporation (NASDAQ:POOL), compared to 40 funds in the prior quarter worth $1.3 billion. Select Equity Group is the leading stakeholder of the company, with 1.3 million shares valued at $433.5 million. 

Baron Funds made the following comment about Pool Corporation (NASDAQ:POOL) in its Q3 2022 investor letter:

“Pool Corporation (NASDAQ:POOL) is the world’s largest distributor of swimming pool supplies, equipment, and related leisure products and is also one of the top three distributors of irrigation and landscape suppliers in the U.S. The company sells over 200,000 products from over 2,200 suppliers to over 120,000 professional contract and retailer customers through its 400-plus sales centers across 12 countries, with 70% of its transactions occurring in person. Within its core pool category, Pool has strong market share and is bigger than its next fifty competitors combined, giving Pool a strong scale advantage and allowing the company to invest in its products, technology, customer service, and supply chain to differentiate itself. Over 60% of Pool’s revenues come from maintenance and repair of existing pools, providing Pool with a large and growing recurring revenue base as more pools are built each year.

Pool has a long history of delivering organic and inorganic growth supported by the recurring nature of most of its revenues while consistently taking market share each year. We believe management will continue to deliver on its growth targets as the company today benefits from favorable U.S. population migration trends and demographic shifts (de-urbanization, southern migration), an aging pool installed base, an increasing number of new features, and technology content both in and around the pool. Pool also recently acquired Porpoise Pool & Patio, which includes a retail store franchise business and chemical packaging operation, enabling new sales and margin growth opportunities for the business.

As the stock sold off on fears of a housing-related slowdown in the pool industry, we accumulated additional shares of this best-in-class company as we believe the current share price is attractive relative to the long-term growth opportunity and value of the business.”

1. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 112

The Walt Disney Company (NYSE:DIS) is one of the top leisure stocks to invest in. On November 22, Tigress Financial analyst Ivan Feinseth reiterated a Buy rating on The Walt Disney Company (NYSE:DIS) but lowered the price target on the shares to $177 from $229 on a re-rating of value given the short-term linear network pressure. However, the analyst believes the return of previous CEO Bob Iger will result in more creativity at Disney, and the continuous release of blockbuster content will support its ongoing growth. The Walt Disney Company (NYSE:DIS)’s resilient balance sheet, cash flow, and smart capital allocation allow it to continue to invest in content development, new theme park attractions, and growth measures, the analyst added. The Walt Disney Company (NYSE:DIS) is on the analyst’s Research Focus List and Focus Opportunity Portfolio.

According to Insider Monkey’s data, 112 hedge funds were bullish on The Walt Disney Company (NYSE:DIS) at the end of Q3 2022, compared to 109 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with a position worth $485 million. 

Here is what Third Point specifically said about The Walt Disney Company (NYSE:DIS) in its Q3 2022 investor letter:

“As disclosed in our Q2 letter, we reinitiated a significant position in The Walt Disney Company (NYSE:DIS) when the company retested its Covid lows earlier this year. At the current price, Disney is trading for little more than the stand-alone value of its Parks business and a mere 15x ’24 “street” consensus. The company remains early in its Direct to Consumer (“DTC”) transition with a leading market position, and yet the current stock price ascribes negligible value to the streaming business. We believe this is due to questions around the terminal economics of streaming, given large losses being generated today at Disney (>$1 billion dollars last quarter) and stagnating margins at peers such as Netflix. On the last earnings call, management highlighted three items that could lead to an inflection in DTC profitability over the next 12 months: a 38% price increase for Disney+ in the US; moderating growth in cash content expense; and an advertising tier for Disney+ launching in two months that can drive additional ARPU given high demand for the Disney brand amongst advertisers.

While the company has guided Disney+ achieving breakeven sometime within the fiscal year ending September 2024, the valuation suggests the market remains skeptical. Disney only trades at ~14x the $7 in earnings generated prior to the Fox acquisition, which implies investors don’t expect earnings to meaningfully exceed this figure in the coming years. Hence, the first value driver we highlighted in our last letter is the opportunity for management to optimize Disney’s cost base to drive earnings growth. We believe Disney has ample means to rationalize costs across its operating platform and deliver targeted content for home viewing that does not entail the same cost structure of exclusive theatrical releases…” (Click here to view the full text)

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Disclosure: None. 10 Best Leisure Stocks To Buy Now is originally published on Insider Monkey.