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5 Rocket Stocks Worth Buying in July

Wyndham Worldwide

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Hotel and timeshare operator Wyndham Worldwide (WYN) is having a good year in 2012. Since the first trading day of January, shares of the $7.6 billion firm have rallied more than 39%. That may seem like surprisingly good performance for a hotel operator in this market, but Wyndham's business model is surprisingly different. The key is its timeshare unit.

Timeshares make up around half of annual earnings, but the income that the timeshare business earns is generally fee-based, making it stickier and replete with much deeper margins than a typical hotel chain could expect to earn. And while hotel rooms tend to be more commoditized than ever these days (thanks to online travel sites that make comparisons extremely easy) Wyndham's timeshares come with built-in barriers to entry from its sizable network.

>>5 Stocks Poised for Breakouts

On the other side of the income statement, most of Wyndham's hotels are franchised, not company owned. That takes most of the risks and costs off of WYN's plate, and puts them onto the franchisee -- an attractive tradeoff for a company like Wyndham, especially in this market, where investors are anxious about capital-intense business models that rely on consumer discretionary spending.

Like DLR, Wyndham reports second-quarter numbers on July 25.

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