Wyndam (NYSE:WYN), Intercontinental (NYSE:IHG), Choice Hotels (NYSE:CHH), Interval Leisure (Nasdaq:IILG) Top FBR Hotel Picks

Commenting on the hotel sector, FBR said their favorite picks at this time are Wyndam (NYSE:WYN), Intercontinental Hotels (NYSE:IHG), Choice Hotels (NYSE:CHH) and Interval Leisure Group(Nasdaq:IILG), based on strength in the upper-upscale segments.

FBR noted, "In our view, we see good investing opportunities, especially in names that have higher exposure to the upscale, midscale, and the economy segments where RevPAR is beginning to outpace gains in the upper-upscale segments. The names we favor most are Wyndam, Intercontinental Hotels, Choice Hotels , and Interval Leisure Group, with the common characteristic being greater exposure to chain scale segments, high-single- to low-double-digit free cash flow yields, and opportunity for valuation multiple expansion, which we see as less likely in names such as Host (NYSE:HST), Marriott (NYSE:MAR), Starwood (NYSE:HOT), and Hyatt (NYSE:H).

"So far, quarter-to-date transient and group segment trends are shaping up to be stronger than in the third quarter of this year. We observe all U.S. transient occupancies to be higher by 180 bps (was +150 bps in 3Q), group occupancies to be higher by 230 bps (was +200 bps in 3Q), transient ADR to be tracking higher by 4.1% (was +4.4% in 3Q), and group ADR to be tracking +0.7% (was –1.0% in 3Q) through the quarter to date ending December 4. Of note, group ADR trended higher by this magnitude for the first time since late 2008."

Wyndam closed Wednesday at $31.02, down $0.06, or 0.19 percent. Intercontinental Hotels closed at $19.62, level from the prior close. Choice Hotels ended the session at $39.31, up $0.30, or 0.77 percent. Interval Leisure closed at $17.08, down $0.26, or 1.50 percent.