2-Star Stocks Poised to Plunge: Strategic Hotels & Resorts?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, luxury hotel operator Strategic Hotels & Resorts (NYS: BEE) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Strategic Hotels' business and see what CAPS investors are saying about the stock right now.

Strategic Hotelsfacts

Headquarters (founded)Chicago (1997)
Market Cap$1.2 billion
IndustryHotel/motel REIT
Trailing-12-Month Revenue$754.6 million
ManagementCEO Laurence Geller
CFO Diane Morefield
Return on Equity (average, past 3 years)(30.5%)
Cash/Debt$72.0 million / $1.1 billion
CompetitorsAshford Hospitality Trust
FelCor Lodging Trust
Host Hotels & Resorts

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 20% of the 204 members who have rated Strategic Hotels believe the stock will underperform the S&P 500 going forward.

Earlier this month, one of those bears, All-Star TrojanFan, highlighted the headwinds working against the stock:

Basically, these are all high end luxury hotels. The hotel business by itself is very cyclical and the luxury hotel business even more so. ... I think it's a much more speculative view to have a strong conviction in a robust recovery at this point given the numerous and significant near term challenges ahead, not the least of which is the ratcheting price of oil which travel decisions are closely tied to. I think it's safer to expect a chug along economy or even a downturn at this point and the chug along scenario isn't going to be sufficient to reinstate the common dividend or drive further growth in the share price.

If you want to retire rich, you need to protect your portfolio from any undue risk. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2012." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story