There's a rerun move taking place in one of Josh Brown's Best Stocks
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Do you like reruns? The pattern developing in hotel and airline stocks right now is nearly identical to what played out in the spring, when oil prices spiked and investors reflexively sold anything tied to consumer travel. We faded it then and we’re fading it now. Marriott International (MAR) is the world’s largest hotel company by number of managed and franchised properties. They sold it last week as Iran war stuff jumped back onto the front page. If you’re waiting for “Mideast tensions” to subside before investing, you’ll be sitting in cash for the rest of your life, your children’s lives and their children’s lives so let’s cut the BS. Marriott is investing to meet the near-record demand for lodging they’re seeing around the world, with revenue per average room (RevPAR) up 4.2% in Q1 vs 2025. They’ve got a pipeline of 618,000 rooms across all their new properties currently in development. The travel boom is unlikely to end this year or next barring a substantial economic downturn. Higher oil prices will not keep people from booking the Hôtel de Berri on the Champs-Élysées, the St. Regis Venice on the Grand Canal or the new Lake Como Ritz-Carlton set to open this year with 59 rooms and 46 suites. You needed to believe that in the spring in order to be along for the ride from the low $330s all the way to $400. Now we’re faced with the same decision: Sell travel on higher oil or ride it out with an understanding of the more important underlying trend? We are also taking our first look at Howmet Aerospace (HWM) , which manufactures precision-engineered components for commercial jet engines and defense aerospace structures and has been on our Best Stocks list since the start of the year. The stock is up 41% year to date and has earned a proper introduction. Howmet is part of the aerospace and defense group which tends to rally as the bombs are dropping. No matter how you slice it, armed conflict ultimately leads to increased orders and dwindling inventories for the defense contractors. This is intuitive, but Howmet is not on many people’s radars (pun intended) as the larger primes. Sean’s got his usual rundown of the high-level stats from the list. He’s also going to bring you up to speed on the fundamental stories at Marriott and Howmet. I’ll be back at the end with how to play them. As of July 27 , there are 208 names on The Best Stocks in the Market list. Top sector ranking: Top industries: Top 5 best stocks by relative strength: Sector spotlight: Marriott update & Howmet Marriott International, Inc. (MAR): Sean — We wrote about Marriott on April 6 , when the stock was struggling to reclaim the low $330s and sentiment was in the dumpster because of the oil spike. Since then, MAR reported a strong Q1 and the stock is up 11%, even with this renewed tension in the Middle East. The Q1 report was clean across the board. Global revenue per room grew 4.2%, gross fee revenues rose 12% to $1.43 billion, adjusted EBITDA grew 15% to $1.4 billion and adjusted EPS of $2.72 was up 17% year over year. Management raised full-year guidance on EPS up 14%-16%, adjusted EBITDA of $5.88 to $5.97 billion, and net rooms growth of 4.5-5%. The development pipeline hit a record 618,000 rooms, with conversions making up over 35% of signings. People are vacationing! Marriott is really an asset-light business. It owns almost none of its hotels, over 99% of its 9,500 properties are owned by third parties. Marriott simply collects high-margin management and franchise fees (a percentage of room revenue) for lending its brands and booking system, meaning the real estate risk and capex sit on someone else’s balance sheet. Rates don’t hurt the hotel chain as much as you’d think. This is really a bet on the consumer and price has been telling us the consumer is willing and able to travel, even with spiking oil prices. Marriott reports Q2 earnings before the open on Aug. 3. The Street is looking for revenue of $7.19 billion (up 6.7% year over year), EBITDA of $1.55 billion (up 9.6%), and EPS of $3.08, which would represent 16.2% growth over last year’s $2.65. Josh — We first wrote about MAR in April, when the oil price spike hammered sentiment on travel names. The stock was struggling to hold $330 from below after a failed breakout. The argument then was that the consumer travel thesis was intact and the sentiment headwind would fade. That call worked: MAR reclaimed $330, ran all the way to the $400 area, and now with renewed tension in the Middle East, the movie is playing again. The stock has pulled back to its 50-day moving average at $376 and that level is being tested in real time. RSI is at 51, neutral, the same kind of reset that preceded the original move off the April lows. The momentum from the run to $400 has cooled without the price giving back most of the gains, which is the kind of digestion that tends to resolve to the upside when the underlying business is working. The 50-day at $376 is where the stock sits right now. If it can hold steadily at or around this level, traders can say the trend is intact and remain long. A breakdown puts the $355 area in play, where MAR built support during the spring consolidation. That’s where I’d draw a line in the sand if I’m a shorter term player. Investors can anchor to $330, the level the stock was fighting to reclaim when we first covered it, which has since become a more distant but meaningful floor. I don’t want it below. You’re risking 12% to remain long one of the highest quality names on our list. Howmet Aerospace, Inc. (HWM): Sean — This is our first time covering Howmet, and it’s overdue. The stock is up 41% year to date, 55% over the past year, and it sits less than 0.5% below its 52-week high. HWM has also been a meaningful Porterhouse holding (see disclosures below). Howmet makes the precision parts deep inside the aerospace supply chain. The cast and forged blades and rings that go into jet engines, aerospace fasteners, structural castings and forged aluminum truck wheels. Because these are mission-critical components with few qualified suppliers, Howmet has real pricing power in the industry. Q1 was a record quarter. Revenue of $2.31 billion grew 19% year-over-year, adjusted EPS of $1.22 grew 42%, and adjusted EBITDA margin hit a record 32%, up 320 basis points. Engine spares (spare parts) revenue grew 48%. And if you thought we’d go one article without mentioning AI, you’d be wrong. Gas turbine revenue grew 39% on power generation demand for data centers, a market management believes could double over the next 3-5 years. Howmet has finalized contract positions with six of its seven major gas turbine customers. The company closed its $1.8 billion acquisition of CAM Fasteners on April 6, adding roughly $275 million of 2026 revenue to the Fastening Systems segment with EPS accretion expected starting in 2027. Net leverage moved to 1.6x post-deal but should decline through the year on a $1.75 billion free cash flow guide and Fitch upgraded the credit rating to A-, all good things for a company with some debt. Full-year guidance calls for $9.65 billion in revenue, $4.94 in adjusted EPS and 10-14% organic revenue growth. Howmet reports Q2 earnings before the open on Aug. 6. Consensus calls for revenue of $2.43 billion (up 18.3% year-over-year), EBITDA of $772 million (up 31.1%), and EPS of $1.25, which would be 36.9% growth over last year’s $0.91. Josh — HWM has been a pristine uptrend since the start of the year and it’s been on our list for a while. As you’ll see in the disclosure below, we currently own this name for clients in our Porterhouse portfolio strategy and with good reason. In the chart above, you can see the stairstep of the higher lows clustering around a rising 50-day while the 200-day gradually grinds higher below. We dream of charts like these when we close our eyes at night. This is a stock that has been in a steady, well-defined uptrend since last summer, climbing from around $175 to nearly $290, with just one meaningful interruption along the way. In February and March the stock pulled back sharply to the $210 range before buyers stepped in and absorbed the selling. That test is now a distant memory; HWM has since pushed to new highs on this timeframe and is knocking on $300. RSI is at 66, so it’s got real momentum without being stretched. Traders can use $265 as their reference point. A breakdown through that level would suggest the move has stalled. Investors can anchor to $250, where the stock found support in June before the most recent leg higher. The buyers showed up $250 and cleaned up the sellers within a few days last month. Unless something changes with the fundamentals, I’d expect them to do so again on any weakness. DISCLOSURES: We currently own shares of HWM for clients in our Porterhouse strategy. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. 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