Gravy Train Coming for Orient-Express

Compared with this time last year, when travel was still being affected by the SARS epidemic and the war with Iraq, business is booming. However, shares of travel-related stocks have stumbled. In the last month, while the S&P 500 is up nearly 1%, the Dow Jones Lodging Index is down about 3%.

Perhaps this is because many of these stocks had such a big run-up leading to the summer months, so the expectations of better results were already factored into the shares. Indeed, the lodging index is up close to 10% year to date, still better than the flattish return on the market overall.

This does not explain, however, why shares of Orient-Express Hotels (OEH Quote) -- the owner and operator of ultra-high-end and unique hotel properties around the world -- have not only lagged the market in the past month, down slightly more than 3%, but have also underperformed year to date, falling 6%. ...