Bricks and Mortar: Check Into Hilton Hotels

Editor's note: "Bricks and Mortar" is a series of columns written by real estate reporter Nicholas Yulico meant to help TheStreet.com readers generate real-estate-related stock ideas.

---

Last week proved trying for many investors, with the S&P 500 falling 4.4% on fears of an economic slowdown in China and the U.S. The increased volatility led to an indiscriminate selloff in many sectors, including the real estate and gaming stocks on which Bricks and Mortar focuses.

The existing selections held up relatively well, and my flagging of Ryland(RYL Quote) as overvalued proved timely, with the homebuilder's stock now down 15% since late January. I provide an update on Ryland below.

To navigate the coming months, wise investors will focus on a big-picture investment theme. One good strategy is betting on the high-end plays of the economy, which continue to do very well, as opposed to the middle and bottom parts of the economy, which show signs of hurt. That's why today I'm adding Hilton Hotels(HLT Quote) to the mock portfolio as a company for the long haul.

The recent plunge in the broader markets has sent Hilton's stock down to below $35 -- a level it has not seen since late January, right before the company reported strong fourth-quarter earnings.

In that report Hilton raised its guidance, saying RevPAR will grow 9% to 11% this year, up from previous guidance of 7% to 9%. (RevPAR, or revenue per available room, is a key hotel operating metric.) Hilton shares subsequently soared to $37.50 in February, before the recent slide back down. The stock closed at $34.69 Friday.