2 Stocks to Watch Amid Royal Wedding Fever

Will this weekend's nuptials be a boon for travel stock TRIP?

by Andrea Kramer

Published on May 18, 2018 at 2:10 PM

Unless you've been living under a rock, you're probably aware that Britain's Prince Harry and American actress Meghan Markle are getting married at Windsor Castle this weekend. The couple's nuptials are expected to inject more than $1.4 billion into the U.K. economy, with much of that stemming from tourism -- a possible boon for travel stock TripAdvisor Inc (NASDAQ:TRIP). Meanwhile, Dunkin Donuts parent Dunkin Brands Group Inc (NASDAQ:DNKN) is giving a nod to the couple with a limited-time offering of the Royal Love Donut. And, perhaps more importantly, both TRIP and DNKN stocks have quietly muscled higher lately, and could attract more bulls.

Many people -- namely American anglophiles -- have paid big bucks to travel to England for the festivities. That could be good news for TripAdvisor. Earlier this month, the stock gapped higher on well-received earnings, and is now attempting to find support in the $46-$48 area -- a neighborhood that's acted as resistance in the past. TRIP shares were last seen trading around $48.25, up more than 57% in the past six months.

trip stock chart

A short squeeze could help TRIP extend its breakout, too. Short interest represents nearly 19% of the stock's total available float, or more than two weeks' worth of pent-up buying demand, at the security's average trading volume.

Plus, analysts have yet to capitulate. Despite TRIP stock's surge in 2018, just one analyst considers it worthy of a "buy" or better rating, compared to 22 brokerage firms maintaining tepid "hold" or worse recommendations. A round of upgrades could also lure more buyers to the table.

Will Dunkin make a killing on its Royal Love donut? Probably not, but the stock is still worth watching -- especially as there's plenty of room on the bullish bandwagon.

Dunkin Brands stock touched a record high of $68.45 in late January, before pulling back in the broader stock market correction. However, DNKN shares found support in the form of their 200-day moving average, and they've now added more than 15% in the past six months. At last check, Dunkin stock was fairly close to its all-time high -- and back in the black on a year-to-date basis -- docked at $65.82.

DNKN stock chart

As with TRIP, Dunkin stock has yet to convince the skeptics. Short interest grew 14.5% in the most recent reporting period, and now accounts for 14% of the stocks' float. At DNKN's average pace of trading, it would take almost two weeks to repurchase these pessimistic positions -- plenty of fuel for a short-covering rally.

Meanwhile, not even half of the 18 analysts following the breakfast concern deem it worthy of a "buy" endorsement. Upgrades in the wake of DNKN's recent rally could be a tailwind for the shares.

What's more, an unwinding of skepticism in the options pits could also be a boon for Dunkin. The stock's Schaeffer's put/call open interest ratio (SOIR) sits at 2.19 -- at the very top of its annual range. This indicates that near-term options traders haven't been more put-biased on DNKN in the past year.


a schaeffer's exclusive

5 NEW STOCK PICKS

We're celebrating 38 years with this FREE insider report!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


What's Next for the American Wealth Gap
Porter Stansberry is predicting a major change in the American economic system.
INmune Bio Stock Gains on New "Buy" Rating
The shares hit a record low just last week
Double Downgrade Drags Hawaiian Holdings Stock to New Low
The airline stock is down more than 5% today
IRA/401K Investment Guide: 2019 Stock Market Crash
Use gold to protect any IRA, 401(k), or retirement account from a looming financial crisis.