The Flight Centre Travel Group Ltd (ASX: FLT) share price has roared higher over the last 30 days, likely leaving the travel agent’s investors excited for its future.
But the stock’s surge may have left market watchers wondering if it’s too late to jump on the bandwagon.
At market open on Wednesday, the Flight Centre share price is $19.53 – 17.9% higher than it was this time last month. That’s despite the stock taking a 5.4% tumble yesterday.
So, with its half-year earnings set to be released tomorrow, could the travel stock take off again? Let’s take a look.
Will Flight Centre shares continue their up-and-up trajectory?
After a turbulent January, the Flight Centre share price has rebounded to serve investors an 18% gain.
The boost came amid the complete reopening of Australia’s international border this week, as well as news Western Australia’s hard border is set to lift on 3 March.
Though, while the grass is certainly looking greener, it might not be blue skies ahead for Flight Centre.
As The Motley Fool’s Bernd Struben reported earlier this week, it could be years before the travel industry fully returns to its pre-pandemic self.
Additionally, the travel agent’s stock remains the most shorted on the ASX.
Flight Centres shares had a short interest of 15.45% in The Motley Fool’s most recent weekly short-selling breakdown.
Of course, that suggests there’s significantly bearish sentiment regarding the Flight Centre share price among short-sellers.
Such sentiment might be explained by the company’s valuation.
As Airlie Funds Management portfolio manager Matt Williams told the Australian Financial Review, the company’s enterprise value is already higher than it was prior to the pandemic.
That means its recovery looks to be already priced into its shares.
Not to mention, the company underwent a $700 million capital raise in April 2020, handing out 97.2 million new shares. That represents a 96.1% increase on the number of outstanding shares in the company.
It later issued $400 million of convertible notes, due in 2027.
That also helped boost its market capitalisation to higher than it was pre-pandemic.
All in all, Williams warned investors to be wary of buying into the company at its current price. Particularly, as there could be a way to go before the Australian travel industry returns to its pre-pandemic self.
The post Up 18% in a month, is it too late to buy Flight Centre (ASX:FLT) shares? 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 over 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 January 13th 2022
More reading
- These are the 10 most shorted ASX shares
- Borders just reopened so why is the Flight Centre (ASX:FLT) share price falling today?
- The Flight Centre (ASX:FLT) share price just surged to a 3-month high. Here’s why
- Why are ASX travel shares taking flight today?
- These are the 10 most shorted ASX shares
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/ZiMKz1h
Leave a Reply