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It's a big noisy universe of stocks out there. Welcome to Goodbye or Good Buy. Our goal to help cut through that noise to navigate the best moves for your portfolio. Today, we're checking in on how to play the shifting consumer spending. I'm here with Explosive Options Technical Analyst Bob Lang. Bob, thanks for being here.

Great to be with you, Julie.

You wear more than one hats now. First, you talked to us about options. Now we're doing Goodbye or Good Buy. Let's start with your buy, Hyatt Hotels. H is the ticker on this one. And the stock is already up around 25% in the past year. But you think it's going to keep going. So let's talk about why. Part of it is following that momentum, I guess, up to the new highs.

Yeah, right near new highs, Julie, and last week we heard from Hilton, one of their big competitors. And then tomorrow morning we're going to hear from Marriott, another one of the big competitors. And the stock has been kind of been dragging up towards those new highs with these other two names. Um but when you look at the strength that's been in some of these consumer brands, like the Marriott, like the Hilton, then when you look at online travel, Expedia last week had really some great numbers, too. You have to put it all together and just understand that a huge brand like Hyatt is going to do extremely well going forward. I think where they have an advantage, Julie, is in the international markets and really have a really a premier brand out there. And they're looking for some some big upside in international numbers when they report their earnings later in the quarter.

What we've heard from the other companies, how is that? What have we extrapolated from them that that can we we can apply to Hyatt?

Well, I I think when when you look at the the pricing of these other hotels, I think Hyatt is extremely competitive. I mean, again, it's a premier luxury brand, especially when you look at overseas markets. Um everybody wants to stay at a Hyatt. I think, you know, there's there's a lot of competition out there and a lot of the hotels are very are are nice and they're fine. But I think Hyatt just is a level above all the rest of them and I think that that's where they have a an advantage, especially with the pricing.

Yeah, and that's, I guess, your third point here is is that premier premier brand. We've seen hotel pricing move up quite a bit, really across the board.

Yep.

But, I guess, if people are feeling like they're getting that value proposition here, they're still willing to pay up.

Yes. Yeah.

That's exactly right. And I think, you know, the consumer has been very, very strong. You know, the job market is real is still robust and people still are are working, they're making money and they want to travel. And and we certainly heard that from Expedia. We're going to hear a little bit more of that from booking.com later on this month. And some of the other names, smaller names even, like MakeMyTrip, which is in India, when and Hyatt has actually made some great inroads in Asia and in India. They're they're seeing some robust travel plans as well, too, for for later on this year.

And let's talk about, we always like to point out potential risks or things that could go wrong here. Most of this has to do with sort of macro in your view, things that could weigh on Hyatt. Talk me through those.

Yeah.

Yeah.

Well, I I I think, you know, there's always the specter of the effect of tariffs on on some of these brands. And it's, you know, it's going to affect a lot of different groups, a lot of different areas. You think, well, you know, how's it going to affect hotels? Well, you know, I mean, look, if people are reticent to travel and they start seeing prices going up because of the tariffs, they're they're they're more likely not to travel. And that's going to decrease the demand and possibly hurt sales for for Hyatt.

Yeah. Especially, I guess, if they're more internationally exposed than some of their competitors.

That's That's exactly right. And then also you might want to say about the economy. If the economy starts to slow down a little bit, well, there's a trickle-down effect with that and we might see some less robust travel in the summertime and into the fall. Um but as of right now, we're not seeing that yet.

Yeah, we're all still going everywhere. All right, let's talk about the stock you don't like as much. That is ELF for e.l.f. Beauty. The shares are already down about 59% over the past year. I mean, we talk sometimes about the lipstick economy that people will still spend on little luxuries even if things go slow down, but ELF has not been riding things very well lately. And we've seen that in the numbers. The company just reported and it was a disappointing quarter.

Yep.

Boy, bad gets to worse. I mean, you talk about ELF and we got a company that is not executing very well. You've got a stock market is at or near all-time high. So you've got a huge divergence there between a company that is struggling with margins, they're struggling to make sales. You've got competitors out there like Ulta Beauty and Estee Lauder that are actually doing a little bit better. Not they're not doing great, but they're doing better than ELF. And they're really having a difficult time trying to define who they are. And I I think that that's the problem with ELF Beauty right here. But you know, these competitors are going to leave them in the dust. And you can see that action in the in the price chart, evidently, if the stock's at a two-year low. I mean, you know, you ask me, you know, Bob, if you're if you see a stock that's at a two-year low versus the S&P 500, which is at near all-time highs, you know, you got a problem there. And and I think that ELF Beauty has has some issues going forward.

Um, let's talk about the forecast, too, because, you know, it had a weak last quarter, but it also cut its guidance for the full year.

Yep.

That's another reason for people to sell the stock. I mean, why why would you want to be in a company that's cutting guidance into an economy that's growing possibly 3% this quarter and beyond in the in 2025? So, yeah, that's that's a problem for the for the stock.

And there's also been an increase in short interest. Now, on the one hand, obviously, that's an indication of bearishness. On the other hand, if there is somehow good news, do you risk a short squeeze?

Yeah.

Well, absolutely. And and and that's a problem as well, too, for for the people who are long the stock. And why is that? It's because, you know, people get short the stock because they see down the road lower prices ahead. And you know, there's always a, you know, short short interest when it starts to rise, it's always a problem for for the short seller in case the stock, you know, moves back up and you get that squeeze that you're talking about. But I think the confidence that the short sellers have in this company going down even further is very, very large. And I I think you have to really go with the go with the flow and go with the trend right now, and it's down.

All right, let's talk about what could go right for ELF, right? So, you know, there are things that could go better. I I actually want to take the last one first, the lower cost structure because traditionally that has been the brand's strength, that they are more of a bargain brand, but it hasn't been working lately.

Yeah. Yeah.

Well, the problem is is that, you know, Julie, commodities right now are the price of commodities are starting to rise, and which means their cost inputs are starting to rise as well, too. So if they're going to cut prices, like you said, and they're continue to be the low cost leader out there, you know what they're risking themselves with? Margin. And margins are going to be are going to shrink. And, you know, investors are not going to pay up for for low margin or shrinking margins in their in their business. So I think that that that is certainly a reason for for you to avoid the stock. But if they manage to get to have some improvement there in those margins, I think you're going to, you know, you see some investors starting to sniff around again.

And or what if we see consolidation and competitors? Why would that be better for ELF?

Yep.

So consolidation and competitors means fewer competitors out there. We we saw a lot of that happening in the high-end retail market more recently. I know there was a potential of a of of a mix with TPR, which is Tapestry, and Capri. That that was broken up. But still, I think that that sort of dynamic there is going to help ELF brands. And possibly, you know, if they if the stock gets cheap enough, they could certainly be a be suited as well, too, possibly. I know there's been some talk in the past about some private equity companies coming after some of these beauty companies. I know Estee Lauder has has been in the in the sites of some of these private equity companies, too. So that could also enter into the into play and lift the stock up.

But for now, not in your view. All right, and and just quickly, do you have positions in either of these guys?

I have some call options in Hyatt. I don't have any positions in ELF Beauty. So.

Bob, thanks for coming in. Appreciate it.

Great to be here, Julie.

And thank you for watching Goodbye or Good Buy. We'll bring you new episodes at 3:30 p.m. Eastern.