Home » Bear Case Scenario » Bear Case Scenario for Hyatt Hotels $H, $HOT, $WYN, $MAR, $HLT, $ACRFF

Bear Case Scenario for Hyatt Hotels $H, $HOT, $WYN, $MAR, $HLT, $ACRFF

Hyatt Hotels (NYSE:H) is about to release earnings. Ponder this Bear Case Scenario

Return on invested capital is less than 3% in the past five years. At the prices they charge that’s criminal.

Hyatt certainly overpaid for the LodgeWorks acquisition. The purchase price at a rich next-year enterprise value/EBITDA multiple of over 16 times. This  implies a first-year cash-on-cash return (EBITDA/investment) of 6.2%. Not worth it.

Pritzkers have a lock on control of the company, and it’s virtually impossible for minority shareholders to effect needed change in the management suite or board of directors. Smacks of the Bancroft family holding Wall St Journal not that long ago.

George Gutowski writes from a caveat emptor perspective.