Why didn’t Flight Centre (ASX:FLT) shares enjoy any Christmas cheer in December?

a sad woman sits leaning on her suitcase in a deserted airport lounge

The Flight Centre Travel Group Ltd (ASX: FLT) share price has struggled over the final month of 2021.

The difficult period came as short interest in the company’s shares remains high. In fact, it’s continued to hold the title of the most shorted stock on the ASX throughout this month.

As of Thursday’s close, Flight Centre shares were trading at $17.73. That’s 0.1% lower than at the start of December.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 3.5% over the same period.

Let’s take a closer look at what might have weighed on the travel agency’s shares this month.

An acquisition fails to excite

Flight Centre shares have slumped this month despite the company announcing non-price sensitive news of an acquisition.

The company purchased technology company, Compli.ai for its browser extension, Shep. It plans to integrate Shep into its flagship business travel division, FCM travel management.

According to Flight Centre, Shep will see FCM place its own content on third party websites used by corporate customers. Doing so is expected to enhance consistency and deliver better control, duty of care, sustainability, and communication to its customers.

More COVID-19 outbreaks

The acquisition didn’t appear to excite the market. Perhaps investor enthusiasm for Flight Centre shares might be being curbed by grounded flights and Omicron outbreaks.

While Prime Minister Scott Morrison last week declared Australia wasn’t going back to “shutting down people’s lives” by implementing lockdowns, outbreaks of the COVID-19 variant caused New Zealand to delay reopening its borders and other countries to reinstate COVID-19 restrictions.

Additionally, as The Motley Fool Australia reported earlier this week, airlines around the world are struggling to staff flights as flight crews are forced to isolate after encountering people infected by COVID-19.  

Such an instance was echoed in Australia over the Christmas period. The Australian reported some airlines were forced to cancel multiple domestic flights on Christmas Eve after staff were identified as close contacts.

Flight Centre share price ups and downs

On top of that, some experts have recently expressed concerns that Flight Centre – and its share price – will struggle to break even in the future.

Whether all this has, or has not, weighed on Flight Centre shares is impossible to say.

Still, the dip hasn’t been enough to plunge it into the long-term red. Right now, the company’s stock is trading for 10.5% more than it was at the start of 2021.

The post Why didn’t Flight Centre (ASX:FLT) shares enjoy any Christmas cheer in December? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Flight Centre right now?

Before you consider Flight Centre, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Flight Centre wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3qA824Y

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s