Recent volatility in global markets on Brexit concerns has hit shares of global hotelier Intercontinental Hotels Group (NYSE: IHG), which have fallen  double digits at various times in the last few weeks. But a recent analysis shows that the Global Income Edge Aggressive Portfolio holding’s fundamentals on balance continue to be strong. 

High oil prices affected tourism/travel in some of its businesses in the Mideast, and an early Easter was also the reason that shares of IHG were hurt, according to management and market analysis.

These are temporary issues, so we still believe the hotel group will do well in the long term, but it may face some headwinds as various parts of the world are experiencing slower growth.

Our Aggressive Portfolio is more sensitive to global growth changes and market volatility. We believe the portfolio will outperform when global growth returns, but in the meantime we’ve had to contend with high share price volatility that we believe has had nothing to do with fundamentals, but instead is a result of fear-selling in the broad market, and this is a clear case.

The IHG CEO continues to have confidence: “Despite economic and political uncertainty in some markets, current trading trends and the momentum behind our brands give us confidence for the rest of the year.”

And certainly the U.S. operations have been doing well, more than half of InterContinental’s rooms are in the U.S., where revenue per available room  rose 1.5%, driven by record levels of industry demand. Demand was weaker in oil producing areas. The company also bought U.S. boutique chain Kimpton Hotels last year, which help expand its reach into the U.S. upscale segment.

We continue to believe Aggressive Holdings such as IHG will be the first beneficiaries when global growth returns, but this may happen in fits and starts.

IHG is a Buy up to $45