ILG

ILG Inc

Consumer


Presented:06/28/2016
Price:$14.79
Cap:$1.99B
Current Price:$34.13
Cap:$4.25B

Presented

Date06/28/2016
Price$14.79
Market Cap$1.99B
Ent Value$1.16B
P/E Ratio11.68x
Book Value$7.65
Div Yield3.19%
Shares O/S128.66M
Ave Daily Vol2,795,237
Short Int5.56%

Current

Price$34.13
Market Cap$4.25B
ILG, Inc. engages in the provision of non-traditional lodging, encompassing a portfolio of leisure businesses from vacation exchange and rental to vacation ownership. It operates through the Exchange and Rental, and Vacation Ownership segments. The Exchange and Rental segment consists of Interval International, the Hyatt Residence Club, the Trading Places International operated exchange business, and Aqua-Aston Hospitality. The Vacation Ownership concerns management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests; and related services to owners and associations. The company was founded in May 2008 and is headquartered in Miami, FL.

Publicly traded companies mentioned herein: Diamond Resorts International Inc (DRII), Hilton Worldwide Holdings Inc (HLT), Hyatt Hotels Corporation (H), Interval Leisure Group Inc (IILG), Marriott International Inc (MAR), Marriott Vacations Worldwide Corp (VAC), Starwood Hotels & Resorts Worldwide Inc (HOT)

Highlights

The presenter is long shares of Interval Leisure Group (“IILG”) at ~$14.50, which recently completed the acquisition of Vistana Signature Experiences (“Vistana”) from Starwood (May 2016). The spin-off of Vistana helps move the Starwood-Marriott deal forward, and gives IILG a number of valuable real estate and cash assets that complement both its name brand portfolio of timeshare assets (including Hyatt, Westin and Sheraton) and Exchange and Rentals business, creating a favorable risk/ reward setup for shareholders. In addition, timeshare owner demographics are improving and FCF generation is strong. In his opinion, using conservative multiples for a sum-of-the-parts analysis and taking share repurchase activity into consideration suggests there should be at least 40% upside (to $20) over the next two years; and, there is optionality around the build out and monetization of new timeshares.

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