So, on Monday, Australia’s international border was opened for the first time in two years.
When it was clear in March 2020 that the COVID-19 pandemic had taken hold in the country, the federal government sealed the borders. And during the last couple of years, Australia ended up with arguably the harshest isolation measures in the developed world, with some of its own citizens having trouble entering.
But a flight from Los Angeles landing in Sydney on Monday morning marked the teary end of Australia’s self-imposed exile, according to the Sydney Morning Herald.
All fully vaccinated travellers are now allowed to enter Australia without having to serve any isolation periods.
It’s wonderful news for separated family and friends, as well as the tourism sector.
But one expert nominated an unexpected ASX-listed company that would be celebrating Australia rejoining the international community.
Who knew a non-travel company could be so dependent on open borders?
TPG Telecom Ltd (ASX: TPG) is the third-largest telecommunications company in Australia, operating recognisable brands like Vodafone, TPG, and iiNet.
Like most technology stocks, the TPG share price has taken a brutal hit recently.
The company’s shares have fallen almost 18% since their high on 4 October to close Monday at $5.97.
But for Red Leaf Securities chief executive John Athanasiou, TPG is set to increase earnings from Australia’s reopening.
“We expect TPG to benefit from increasing demand for global roaming services in response to international borders re-opening,” he told The Bull.
He’s not the only one thinking the same way. Investors Mutual Limited senior portfolio manager Simon Conn last week cited the same tailwind in marking TPG shares as a buy.
“It’s a fully integrated telecommunications business that has been impacted by COVID, with the lack of roaming, as people haven’t been travelling and overseas arrivals haven’t been coming into the country.”
Athanasiou also likes the outlook for another segment of its business.
“TPG is capable of growing its fixed wireless business, which we expect will provide further upside to its shareholders.”
Conn agreed, seeing what TPG’s bigger rival did with its infrastructure.
“Telstra Corporation Ltd (ASX: TLS) just sold their towers business for 28 times EBITDA,” he said in a Livewire video.
“TPG trades at eight times and they have a similar asset base, which they could then sell and stake in to crystallise some value and pay down debt and accelerate the increase in dividends.”
The post Australia’s borders just reopened: The ASX share set to cash in appeared first on The Motley Fool Australia.
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Motley Fool contributor Tony Yoo 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 owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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