The Flight Centre Travel Group Ltd (ASX: FLT) share price has struggled over the last 30 days while that of its S&P/ASX 200 Index (ASX: XJO) travel peer Webjet Limited (ASX: WEB) has outperformed.

The Flight Centre share price is currently 1.6% lower than it was this time last month, trading at $20.63.

In that time, stock in Webjet has gained 6.7% to trade at $6.14.

For context, the ASX 200 has traded relatively flat over the last 30 days, gaining just 0.16%.

So, why have the ASX travel shares – which both recently announced their return to profitability – traded in such different directions lately? Let’s take a look.

Is this going wrong for the Flight Centre share price?

There are a few possible reasons behind the differing performances of the Flight Centre share price and that of Webjet.

Firstly, the companies currently have varying short positions.

Flight Centre shares are trading with a 16.2% short position, according to the most recent data available.

That’s fallen by nearly 1% over the last month. However, the dip isn’t nearly enough for the company to shake its title of the ASX’s most shorted share.

Of course, such high short interest means many market participants are effectively betting against the company’s COVID-19 recovery.

Meanwhile, Webjet has a smaller – though, still meaningful – 9.4% short interest.

Thus, more short sellers appear dubious of Flight Centre share price’s future. Could that be due to brokers’ outlook for the respective ASX travel stocks?

What do the experts say?

Back in February, The Motley Fool Australia reported that Goldman Sachs believed Webjet was a better buy than Flight Centre.

The broker saw growth potential in the former’s business to business (B2B) and business to customer (B2C) markets.

And now, an equity analyst from Citi has reportedly expressed similar sentiments.

Citi’s Samuel Seow believes Webjet is the best ASX 200 travel buy while Flight Centre is the worst, The Australian reported.

The analyst is said to like Webjet’s business model and B2B segment. Meanwhile, Flight Centre was reportedly tipped to face headwinds from a slow uptick in Australian international volumes and ‘visiting friends and relatives’ travel.  

Citi reportedly has a $15.55 price target and a ‘sell’ rating on Flight Centres shares. Meanwhile, it’s said to have delivered Webjet’s stock a $6.94 price target and a ‘buy’ rating.

The post Why is the Flight Centre share price trailing Webjet lately? appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX shares
• The Flight Centre share price is soaring 3% today. Could this be behind its gains?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Goldman Sachs. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The silent killer of purchasing power, inflation, has been on full display in recent months. As rapidly ascending prices for goods and services push inflation to multi-decade highs, the remedy of higher interest rates has weighed on ASX shares. Although, a company featuring in the All Ordinaries Index (ASX: XAO) might buck the trend.

Best & Less Group Holdings Ltd (ASX: BST) is a value-oriented clothing retailer in Australia. Shares in the company have struggled since listing on the ASX last year. On a year-to-date basis, the Best & Less share price is down 36%.

However, there are hints that perhaps an inflationary environment can be a positive for companies like Best & Less.

Inflation-fighting within the ASX All Ords

Unlike other ASX-listed retailers, Best & Less focuses on value-conscious consumers. This strategy has proven well for the company over recent years, generating more than $600 million in revenue. But, this could be primed for a boost.

In November last year, data from Facteus indicated a 65% increase in discount store spending compared to the same time last year. Since then, inflation has worsened — hitting a 41-year high of 8.5% in March in the United States. Meanwhile, Australia reached its highest level since 2009 with an annual increase of 5.1%.

Furthermore, US discount giants Dollar Tree Inc (NASDAQ: DLTR) and Dollar General Corp (NYSE: DG) released positive earnings results in May. Both companies enjoyed double-digit increases in their respective share prices following the news.

In an interview with the US’s National Public Radio, Harvard business professor Willy Shih explained the phenomena, stating:

I think it says that a lot of people in this country are feeling the effects of inflation and they are looking for lower prices. And when you’re looking for lower prices, that’s one of the places you go, especially a place like Dollar Tree, where you now know that everything costs $1.25. So if I’m trying to save money, that’s probably a good place to go.

It is possible Best & Less is an ASX All Ords share that could similarly benefit. On 4 May 2022, the company revealed sales were ahead in the fourth quarter compared to the prior corresponding period. If more consumers look to cut household costs, a value apparel option such as Best & Less might see increased spending.

What else?

As my colleague Tristan Harrison covered, Macquarie is expecting Best & Less to dish out a decent dividend. If analysts at the investment bank are right, shareholders could land a dividend that equates to a grossed-up yield of 16%.

The Best & Less share price is currently fetching $2.64 per share.

The post Could this ASX All Ords share be set to benefit from higher living costs? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Transurban Group (ASX: TCL) share price is stuck in reverse today after it was downgraded by a top broker.

Shares in the toll road operator skidded 1.94% to $14.41 in the last hour of trade on Monday. In contrast, the S&P/ASX 200 Index (ASX: XJO) recovered some of its early losses to trade 0.47% lower at the time of writing.

The underperformance of the Transurban share price comes after it zoomed ahead by around 20% since late January.

Transurban share price offers little inflation protection

Its shares have been well supported in this environment due to its relatively dependable earnings and dividends. Some have also jumped into the shares for its inflation protection properties.

But Transurban may not offer as much protection as investors might believe, according to Credit Suisse.

The broker downgraded the Transurban share price to “neutral” from “outperform”, noting the correlation between the group’s tolls and inflation is weak.

Outside the comfort zone

This is particularly in a higher consumer price index (CPI) environment where Atlas Arteria Group (ASX: ALX) offers a better inflation hedge, according to the broker.

Credit Suisse said in a note released today:

In a CPI range of 0-4%, there is only a 33% link of toll prices to CPI, and a 60% link when CPI is greater than 4%. At Atlas Arteria’s APRR toll network in France, the tolls increase at 70% of CPI. The toll formulas for Transurban’s roads tend to be optimized for CPI at 1-2% and are less optimal in 2-5% CPI range.

Rising debt costs drags on Transurban’s share price

Meanwhile, rising interest rates will put the squeeze on the company’s earnings too. The average cost of its Australian debt is 4%. When the debt is refinanced, it will likely rise, noted Credit Suisse.

Around 12% of Transurban’s debt will mature in FY23 with a similar amount due in the following three years.

While the broker increased its revenue forecast for the Transurban share price by 1.3% and 1.8% in FY23 and FY24 respectively, it cut its free cash flow expectations due to the rising cost of debt. This also means lower dividend per share (DPS) in the coming years.

Dividend pressure building

The broker explained:

We assume maturing debt is refinanced at a 5.0% rate. This raised debt cost by ~4%, ~10%, and 15% in FY23, FY24, and FY25, respectively. Free cash flow (excluding capital releases) and DPS forecasts fall 1.4% and 2.6% in FY24 and FY25, respectively.

Credit Suisse is telling investors to consider taking profits after the strong run in the Transurban share price. Its 12-month price target on the shares was cut to $13.60 from $14.60 a share.

The post Transurban share price hit by broker downgrade appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One month ago today, on 6 May, the first cracks began to emerge in Terra’s stablecoin, TerraUSD (CRYPTO: UST), and the token that was meant to help it remain pegged to US$1, Terra (CRYPTO: LUNA).

At the time the algorithmic stablecoin, UST, was among the leading tokens pegged to the US dollar. And Luna had a market cap of some US$28 billion.

By 12 May the collapse of the tokens and the blockchain that supports them was well underway. UST was down 70% and Luna had dropped 97%.

With the cryptos entering what’s called a ‘death spiral’ as crucial investor confidence evaporated, things only got worse from there.

Unable to rescue the original tokens, Terra co-founder Do Kwon and his supporters have pressed through with the launch of a new Terra blockchain, supported by two new tokens.

Namely TerraClassicUSD (CRYPTO: USTC) and Luna 2.0 which is called, well, Terra (CRYPTO: LUNA). Rather than rebrand the new Luna 2.0, the company changed the name of the original to Terra Classic (CRYPTO: LUNC).

UST itself is no more, and its blockchain has been officially halted. As for LUNC? It’s gone from US$86 this time last month to 0.0081 US cents.

Can Terra’s Luna 2.0 avoid another ‘death spiral’

As part of the rescue plan, Terra ‘airdropped’ the new Luna tokens to existing holders.

But according to Thomas Dunleavy, senior analyst at crypto research firm Messari (quoted by Bloomberg):

The airdrop was really poorly structured. It rewarded equity holders – LUNA holders – over savers or bond holders – Anchor depositors or UST holders. Any network in crypto is built on trust, by not only users but also builders who commit their time and capital to grow the network.

So, can Terra’s Luna 2.0 avoid a repeat of what happened to 1.0?

Time will tell.

But it’s not off to a great start.

According to data from CoinMarketCap, the Terra Luna 2.0 price currently stands at US$5.11. That’s down 74% from the US$19.54 the token was worth on 28 May.

The post Can Terra’s Luna 2.0 avoid another ‘death spiral’ appeared first on The Motley Fool Australia.

More reading

• Why did crypto prices get massacred in May?

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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