Where the Gurus Spend the Night

This column was originally published on RealMoney on Nov. 8 at 9:30 a.m. EST. It's being republished as a bonus for TheStreet.com readers.

Two of the world's richest men, Saudi Prince Alwaleed bin Talal and Bill Gates, announced Monday that they are bidding to take luxury hotel operator Four Seasons (FS) private. Beyond the bold-face names involved, the deal is intriguing for another reason: It is one of a wave of hotel acquisitions of late.

The Blackstone Group has been an active player, with the purchase of MeriStar Hospitality, Extended Stay America, and other hotel companies. Earlier this year, Prince Alwaleed bought Fairmont Hotels & Resorts.

It is notable that the smart money appears to expect that the hotel industry will do well. I don't try to guess which companies may be acquisition targets or acquirers, but a solid company that is not acquired could do very well for investors in this atmosphere.

I ran lodging companies through my guru screens to identify those the gurus might find hospitable for their money. Keep in mind that my guru strategies do not take into account if a company might be an acquisition target.

Several hotel operators get a seal of approval from at least one guru strategy.

The giant hotel operator Marriott International (MAR) scores highly with my strategy based on James P. O'Shaughnessy's investing style. It gives Marriott points for its large market cap ($16.6 billion), earnings growth every year for the past five, a price-to-sales ratio below 1.5, indicating that the stock is reasonably priced, and a relative strength of 78, which places it among the top 50 of the stocks that passed the previous screens.

Lodigan (LGN), which owns hotels under franchise from a range of brands, including Holiday Inn and Marriott, does well with my screens based on Joseph Piotroski's investment strategies. Piotroski has found that excess returns can be earned by investing in stocks with high book-to-market ratios, as this suggests the stock is selling below what it should be. Lodigan is in the top 20% of the market based on this ratio.