Ski Stocks Manage Slippery Slope of US Economic Slump

MICHAEL HUME, a stockbroker with A. G. Edwards & Sons Inc., in Incline Village, Nev., seldom sees any trading in ski company stocks. On one recent morning, Mr. Hume noted that by the time 138 million shares of blue-chip stocks had traded on the Big Board, only 800 shares of S-K-I Ltd., a publicly held ski company, had been traded. And he remembers once selling a few shares in another ski company. "Ski stocks," says Mr. Hume, whose office is on the north side of Lake Tahoe, "are small-capitalization stock s with very limited interest."

Whether such stocks should remain that limited in terms of trading is a matter of dispute. Probably such specialized stocks are best held by people who really know the sport, analysts say. Still, within the leisure stocks group, ski issues have been among the more decent performers.

In the period from January through March, many families travel to their favorite ski resorts or to hot-weather spas in Florida, the Caribbean, or California. Thus it's hardly surprising that leisure-related stocks such as those of ski companies, hotel chains, and resort companies, receive extra attention now. Analysts say the recession has clearly taken a toll on the hotel industry and some theme parks, but the ski industry has done fairly well.

The two best-known publicly owned ski resort companies are S-K-I Ltd., traded on the over-the-counter market, and Alpine Meadows of Tahoe Inc., traded on the Pacific Stock Exchange. Both companies have been moneymakers. S-K-I Ltd. is the larger of the two, owning and operating resort properties at Killington, Vt., Mt. Snow, Vt., and Bear Mountain, Calif. Last year Advest Inc., an investment house in Hartford, Conn., changed its recommendation on S-K-I Ltd., from merely holding already-acquired shares in the company to accumulating shares, based in part on the firm's expanding market share.

Ski industry experts predict that many resort operators will generally hold their own this winter, despite recession. The longer-range question, however, is whether the ski industry will prove to be a "growth industry" over time, given the encroachments from other leisure companies, such as The Walt Disney Company, with its family-oriented theme parks. Some analysts say the ski industry must be more innovative if it is to continue to grow. In this period of economic slump, analysts aren't recommending ma ny stocks of companies in the leisure industry But there are some winners. Donaldson, Lufkin & Jenrette (DLJ), for example, likes Disney, which is building or expanding theme parks around the world.

DLJ is not as upbeat about lodging companies, urging caution on large hotel chains such as Hilton and Marriott.

Lodging officials face tough challenges linked to recession, heavy debt, and overexpansion during the 1980s. There are some 3 million hotel and motel rooms in the United States. According to Michele Kelley, an official of the American Hotel and Motel Association, the occupancy rating for November 1991 was 62.3 percent, down from 63.4 percent in November 1990. That means over 1 million hotel rooms were vacant.

Yet Radisson Hotels International, a privately held company that is one of the fastest growing lodging chains in the US, has been adding a new hotel about every 10 days. Based in Minneapolis, Radisson has just announced a new chain of five luxury hotels in Mexico, joining five other Radisson hotels already operating there, notes Karen Waters, a spokeswoman for Radisson.

One of the reasons for Radisson's success, experts say, is because the company franchises and manages most of its lodgings, thus limiting its own financial exposure in its facilities, unlike some publicly traded hotel chains.

Ms. Kelley, of the hotel association, says that industry business may be picking up.

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