The Immutep Ltd (ASX: IMM) share price is down 1.59% at the time of writing trading at 31 cents a share. This follows this morning’s announcement that Immutep is expanding Part B of its cancer treatment clinical trial.

Let’s break down what that means and why it could be moving the Immutep share price today.

More patients recruited for expanded trial

Based in Australia, Immutep develops novel immunotherapy treatments for cancer and autoimmune disease.

In today’s release, the biotechnology company advised that it had recruited 13 more patients with second-line non-small cell lung cancer (NSCLC) for Stage 1 of the now expanded Part B of its TACTI-002 Phase II trial.

The trial extension follows the recommendation of the data monitoring committee following a preliminary safety and efficacy review. TACTI-002 stands for Two ACTive Immunotherapies. 

Immutep is conducting the trial by treating cancer patients with a combination of its eftilagimod alpha product (efti) and Keytruda®, produced by US pharmaceutical company Merck & Co., Inc (NYSE: MRK).

Efti is in clinical development to treat cancer. Immutep has three additional treatments for cancer and autoimmune disease that also are in clinical development.

Immutep’s half-year update

Discussing the company’s leading efti product in its latest half-year FY21 results, Immutep advised:

Following the encouraging clinical results announced for efti last year, Immutep is in a very robust financial and operational position.

The company has increasing confidence in efti and accordingly, three new efti trials or trial extensions with up to 386 patients in different cancer indications were announced or started during the half year, in addition to its ongoing clinical trials of the product candidate.

Immutep is also working on scaling up efti manufacturing in preparation for potential commercial manufacturing and additional registration trials in multiple indications.

Immutep share price snapshot

Despite positive progress on its clinical trials, the Immutep share price has taken a 20.3% dive over the past month. Year-to-date, it’s fallen 24.1%.

The company presently has a market capitalisation of 217.3 million and there are 648.7 million shares outstanding.

More reading

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• Australia’s share market is the world’s best since 1900
• Neometals (ASX:NMT) share price unfazed by battery recycling agreement

Motley Fool contributor Gretchen Kennedy 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 Bruce Jackson.

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The Tilt Renewables Ltd (ASX: TLT) share price is getting hammered today despite the company providing a positive update to the market this morning. The Tilt share price started the day well, opening 2.4% higher at $6.01.

However, at the time of writing, Tilt shares have retreated back to $5.70, down 2.9% for the day so far. The S&P/ASX 200 Index (ASX: XJO) is also having a pretty lousy day, currently down 1.25%.

Tilt Renewables is a company that operates a portfolio of renewable energy assets across Australia and New Zealand, mostly solar and wind farms.

So what did Tilt report today?

Why did the Tilt share price open higher?

The Tilt share price enjoyed a temporary boost on open as a result of an announcement the company made to the ASX this morning. In the announcement, Tilt reported that its Waipipi Wind Farm, located in South Taranaki, New Zealand, has now been completed. The 133-megawatt farm has 31 completed wind turbines. All 31 turbines are now in a position to export power to the grid.

The Waipipi Wind Farm is the company’s largest asset in New Zealand. It will produce an estimated 455 gigawatt-hours of electricity on average per annum. That’s enough to reportedly power 65,000 homes.

It was only back on 12 February that Tilt told the markets that the last two turbines were close to being commissioned for grid exploration, with “construction winding down”.

Here’s what Tilt CEO Deion Campbell had to say on that announcement:

To safely complete construction of 31 of the largest wind turbines ever installed in New Zealand very close to the original schedule is a  superb result, one not common to many large infrastructure projects and a credit to all involved in the planning and execution of the project. This is despite the site being shut down for 5 weeks due to New Zealand’s COVID‐19 pandemic response.

Last month, we reported on how Tilt might be acquired by its major shareholder Infratil Ltd (ASX: IFT). That provided a major boost to the Tilt share price at the time. It seems investors have been reluctant to build on that price momentum after today’s announcement.

Tilt shares are now up a healthy 54% since 4 December last year, and up by around 10% since 20 January. On the current Tilt share price, the company has a market capitalisation of around $2.21 billion.

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Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

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The market may be under appreciating the upside potential for ASX lithium shares. Is UBS estimating that battery supply will need to expand by more than 20 times in the next few years.

ASX lithium miners have been performing strongly as it is. But UBS’ bullish view that is underpinned by its belief that electric vehicles (EVs) are switching to the fast lane could give the sector an extra boost.

ASX lithium shares benefit from EV adoption upgrade

The analysts at UBS took a detailed look at Volkswagen’s first affordable EV offering, the VW ID.3, which should arrive in Australian next year.

“We are more confident than ever in a steep EV penetration curve: 20% market share by 2025, 50% by 2030 (prev. 40%), with a chance of 100% by 2040 (prev. 80%),” said UBS.

“To reach 20% and 50% EV penetration in 2025 and 2030 respectively, we forecast battery cell supply needs to increase c22x to 4.5TWh (up 70% from our previous forecast) over the next decade.

“We also believe the average battery size per vehicle will now be 94kW-hr by 2030, up from our prior estimate of 73kW-hr.”

ASX miners rock to lithium supply shock

The broker’s growing confidence in the penetration rate is bolstered by the view that the cost of EVs will be on par with conventional ones by 2025.

“We don’t think that the raw material supply-side is ready for the wave of demand that is coming should our EV outlook hold,” concluded UBS.

While lithium, the key ingredient in batteries, isn’t a rare commodity, miners aren’t investing enough currently to meet future demand.

Why lithium may be heading higher over the next decade

If you added up all known projects up to 2030, regardless of their feasibility in this environment, UBS said the increase in lithium supply is only enough to satisfy a 22% EV penetration rate.

What this means is that lithium prices are likely to rise over the coming years. Higher prices are needed to incentivise miners to invest in exploration and mine and plant expansions.

Price upgrades support these ASX mining shares

“Accordingly, we have lifted our lithium price forecasts by >10% over the next five years while also upgrading our long term prices by 4-17%,” explained UBS.

“[We] and now forecast US$11,000/t for lithium carbonate (prev. US$10,500/t) and US$700/t for spodumene (prev. US$600/t).”

The upgraded lithium price outlook is good news for ASX lithium shares. These include the Syrah Resources Ltd (ASX: SYR) share price, Galaxy Resources Limited (ASX: GXY) share price and Orocobre Limited (ASX: ORE) share price.

UBS is urging investors to buy all three ASX shares. It also rates the IGO Ltd (ASX: IGO) share price as a “buy” as nickel is another ingredient needed to produce batteries.

More reading

• The Vulcan Energy (ASX:VUL) share price has fallen 17% in 2 weeks
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Motley Fool contributor Brendon Lau 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 Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Between the four major U.S. social media stocks — Facebook (NASDAQ: FB), Twitter (NYSE: TWTR), Pinterest (NYSE: PINS), and Snapchat (NYSE: SNAP) — which was the worst performer of 2020? 

If you guessed Facebook, you’re right. Pinterest’s 250% price rally in 2020 far outpaced Facebook’s 31% gain. Facebook’s returns also lagged the Global X Social Media Index ETF (NASDAQ: SOCL), which tracks over 30 companies involved in social media. In 2020, the ETF posted an annualized return of 78.4%. 

That said, it’s too early to call Facebook an underperformer. This, after all, is a company that’s consistently delivered double-digit percentage growth year after year. The big question is: Can this FANG stock get its bite back? I think so, and here are two reasons why.

1. Facebook executed incredibly well despite COVID-19

Ask corporate America what they thought about 2020 — and many will tell you it was the worst year of the decade. The coronavirus devastated many companies in industries ranging from retail and energy to tourism.

Facebook had a pretty good year, though.

In 2020, Facebook’s revenue rose 22% to $86 billion, driving a 58% surge in net profit to $29 billion. Monthly active users (MAU) also grew 12% year over year, to 2.8 billion.

Initially, there was concern that advertisers would cut back on spending, hurting Facebook’s revenue. But those fears turned out to be unfounded. Forced to stay at home due to COVID-19, people spent more time on social media. To reach these users, businesses had little choice but to keep advertising on Facebook — by far the largest social media network. In 2020, nearly a third of every digital advertising dollar went to Facebook, according to a report by the World Advertising Research Center (WARC).

These numbers validate the strength of Facebook’s business model, which is anchored to the value it provides users. For one, the Facebook family of services — including Facebook, Messenger, Instagram, and WhatsApp — keeps people connected. But Facebook provides much more than “just” communication tools. Its apps are also an avenue for news, entertainment, and business. All these features have made Facebook simply indispensable — and more so amid the pandemic.

Facebook made a few smart moves in 2020. One of them was a renewed push into e-commerce, in partnership with Shopify (NYSE: SHOP). With the launch of Facebook Shops and other e-commerce tools, both companies will make it easier for Facebook’s users to grow their online businesses. 

This gives users yet another reason to spend time on Facebook. And if successful, Facebook’s e-commerce initiatives could improve its user monetization.

2. Investors aren’t very excited about Facebook

As the pandemic ravaged global economies, many small businesses were forced to shut down. Millions of Main Street Americans have lost their jobs.

Still, Wall Street had one of its best years ever. The Nasdaq Composite (NASDAQINDEX: ^IXIC) rose 44% in 2020 — its best performance in 11 years, according to MarketWatch.

Shares of Shopify and MercadoLibre almost tripled in 2020 as they rode on the tailwinds caused by the pandemic. But Facebook — which benefited from the pandemic and delivered solid revenue and profit growth — rose a relatively measly 31%. 

I think investors haven’t neglected Facebook’s strong execution in 2020. Instead, they’ve been rattled by repeated calls to break up Facebook, as well as its very public clash with Apple. That has taken some glitter off Facebook, resulting in it trading at a valuation of less than nine times 2020 revenue.

While that appears reasonable, consider the astronomical valuations enjoyed by trendier tech companies like Snowflake (NYSE: SNOW). Snowflake trades at a whopping 277 times 2020 sales.

Why Facebook is a buy now

Facebook shines when it comes to consistency and growth. Between 2016 and 2020, revenue rose at an impressive compound annual growth rate of 33%. 

In coming years, Facebook will likely keep growing at double-digit rates as it unlocks the value of Instagram and WhatsApp. Facebook could also deliver upside surprises with newer ventures, including the Oculus virtual reality platform and payment services.

In the near term, there’s a risk of a pullback — given Facebook shares have almost doubled from their March 2020 lows. But that shouldn’t deter investors with a five-year time horizon. Facebook is here to stay, and it will only get bigger in years to come.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Lawrence Nga has no position in any of the stocks mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple, Facebook, MercadoLibre, and Twitter. The Motley Fool Australia has recommended Apple and Facebook. 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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Australia has been crowned the best-performing equities market in the world since 1900.

The finding came in the latest Credit Suisse Global Investment Returns Yearbook 2021 report, released Friday.

It reported that Australia came out on top among 23 countries over 121 years in US dollar terms.

In local currency terms, Australian shares returned a real return of 6.8% per year since 1900, to come a close second after South Africa.

“We also rank second lowest in terms of volatility,” said Credit Suisse Australia private banking chief investment officer Andrew McAuley.

“Australia has achieved this remarkable outcome due to a number of factors. The sectoral composition of the market has played a key role as the world economy transformed and progressed over the past 121 years. Financials, materials and health are the largest segments of the Australian equity market.”

In real dollar terms, the Credit Suisse report found $100 invested in 1900 in the Australian market would now be worth $280,600.

Credit Suisse Australia head of equities Mark Davis attributed Australia’s success to “strong fundamentals”.

“A healthy and resilient services economy, a commodities sector linked to the growth economies of Asia, and our robust banking sector, all of which is supported by a flexible monetary set up, a long standing democratic political system that has the full support of the majority of our population, and a transparent legal and regulatory framework.”

For similar reasons, the New Zealand share market also performed well, coming in fourth in performance since 1900. It returned 6.5% per annum in New Zealand dollars.

How the Australian share market fits into the global scene

The Australian share market, which is currently dominated by ASX Ltd (ASX: ASX), used to be split into smaller exchanges in each of the states. The ASX was formed in 1987 after a merger of the state capital city exchanges.

The Aussie market is now the ninth-largest internationally. The United States still accounts for more than 56% of the global market capitalisation. Japan takes up 7.4%, China has 5.1% and the UK is fourth with 4.1%.

In a world far more globalised than 120 years ago, Australian shares represent an attractive destination for both foreign and local capital, according to Davis.

“The just completed Australian company reporting season, for example, represents the fastest company earnings recovery in ASX history, with aggregate earnings revised upwards by 6%.”

Internationally, shares were the best performing long-term investment instrument over the last 121 years, returning 5.3% per annum in real US dollar terms. Bonds returned 2.1%.

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Motley Fool contributor Tony Yoo 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 Bruce Jackson.

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The Neometals Ltd (ASX: NMT) share price is looking a little low on charge this morning after the company announced a memorandum of understanding (MOU) for its battery recycling capabilities.

Following the announcement, shares have ticked down 2.7% to 36 cents. However, the Neometals share price is still up over 105% in the last 6 months. 

Steps in the right direction

Through Primobius (Neometals’ joint venture with SMS Group), Neometals has entered into a non-binding MOU with the Japanese multinational company known as Itochu Corporation. Non-binding MOU’s are quite loose agreements, but it indicates that Neometals is making progress towards an established battery recycling company.

The announcement specified that the MOU provides a framework for establishing a corporation for battery recycling. Primobius’s role would then be contributing its lithium battery processing capabilities.

Formally, Itochu will assess Primobius’ technology by providing stationary energy storage batteries to Primobius’ demonstration plant. From here, Primobius (Neometals/SMS Group) will run the demonstration plant on Itochu’s provided batteries to hopefully produce recycled products.

The goal is that Neometals will successfully recycle cathode materials that can then be reused by Itochu in its battery manufacturing. The advantageous outcome would be a subsequent drop in the cost of the batteries made.

What’s the timeline?

Based on the details of the announcement, Neometals is already in discussions with Itochu to prepare the demonstration plant. The demonstration plant, which will be evaluated by Itochu and be the make or break, is slated to kick off in the June quarter of this year.

Neometals plans to proceed with legally binding agreements in the future to formally outline what the company’s cut of proceeds from any recycled batteries would be.

Today’s announced MOU is effective until 31 December 2022.

Neometals share price recap

The Neometals share price has been on a tear over the past year. Any shareholder that remained steadfast would be sitting on returns of 123% in the last year.

As interest grows in the electric vehicle (EV) space, many have been turning to investments to benefit from the boom. A big hindrance for EVs still is the high cost of the battery component. If Neometals can help reduce that by implementing a cost-effective recycling technology, they could gain traction.

Based on the current Neometals share price, the company now has a market capitalisation of $202 million.

More reading

• Future proofing: Should you invest in a sustainable ASX portfolio?
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Motley Fool contributor Mitchell Lawler 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 Bruce Jackson.

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The Fonterra Shareholders Fund (ASX: FSF) share price is on the rise today, up 1% in morning trade.

This comes after the dairy co-operative lifted its Farmgate Milk Price for the second consecutive month. Fonterra last raised its forecast on 3 February.

Why did Fonterra raise its milk price forecast again?

Fonterra shares are gaining after the co-op raised its Farmgate Milk Price. The strong demand for New Zealand dairy is largely driven by increased demand from China.

In this morning’s ASX release, Fonterra increased its 2020-21 forecast Farmgate Milk Price from NZ$6.90–7.50 to NZ$7.30–7.90 per kilogram of milk solids (kgMS).

Farmers receive the middle of this range, which has increased by 5.5%, from NZ$7.20 to NZ$7.60 per kgMS.

The co-op said its 60-cent price forecast range reflected “continued uncertainties in the global dairy market”. Atop COVID-related uncertainties, milk supplies in the United States and European Union will begin to increase as their milking season starts up.

At the new forecast price, Fonterra said its milk price payments could contribute more than NZ$11.5 billion to the Kiwi economy this year.

Management commentary

Commenting on the increased in its price forecast, Fonterra CEO Miles Hurrell said:

We’ve seen Global Dairy Trade (GDT) prices continuing to increase since February when we last updated on our forecast Farmgate Milk Price and then this week there was the 15% increase in GDT prices.

It’s very much a China demand led story but there is also good demand for New Zealand dairy across South East Asia and the Middle East.

Hurrell said China’s rapid economic rebound from the pandemic has boosted dairy sales in the Middle Kingdom. Part of that increased demand comes from more focus on longer-life dairy products, like whole milk powder.

With a nod to the past year’s COVID related supply disruptions impacting most commodities around the world, he added, “We’re also seeing customers want to buy more of our products than usual to help mitigate the risk of global supply chain delays.

Fonterra will provide its full half-year financial results on 17 March.

Fonterra share price snapshot

The Fonterra share price has performed well over the past 12 months, up 29%. That compares to a 7% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date the Fonterra share price is up 14%.

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Motley Fool contributor Bernd Struben 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 Bruce Jackson.

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Why do bond yields matter to ASX share investors and why is everyone suddenly talking about them? 

What do rising bond yields mean? 

Benchmark United States Government bond yields have been downward trending since late 2018. Yields have managed to plummet from as high as 3.25% in October 2018 to as low as 0.50% in late 2020.  

Record low bond yields mean that investors are forced to seek out higher-risk investments to gain a meaningful return. This translates to a flow of funds from bond markets into higher risk assets such as equity markets. Lower borrowing rates also buoy the economy and encourage greater economic activity from businesses and consumers. 

More recently, bond yields have surged from lows of 0.50% to 1.55% last night. Rising yields have a ripple effect across the economy and the stock market. Higher yields, or interest rates, translate to higher borrowing costs for individuals and businesses. As bond yields inch higher, this could also result in a flow of funds from share markets back into bond markets. 

Furthermore, one of the dangers of record low, near-zero interest rates is that they can inflate asset prices. As bond yields have pushed higher, the sectors that benefitted the most from low yields, such as tech, have been hit the hardest. Meanwhile, cyclical industries and sectors that generate strong cash flows, such as financials, infrastructure and commodities, typically perform better under higher interest rate environments. 

For example, the S&P/ASX 200 Info Tech Index (ASX: XIJ) slumped by more than 10% in February, despite the S&P/ASX 200 Index (ASX: XJO) closing 1% higher. In the last few weeks, the US tech-heavy Nasdaq Composite (NASDAQ: .IXIC) has consistently underperformed the S&P 500 Index (SP: .INX) and the Dow Jones Industrial Average Index (DJX: .DJI).

Household names such as Facebook Inc (NASDAQ: FB), Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN) and Alphabet Inc (NASDAQ: GOOGL) have all been dragging the Nasdaq lower recently.

ASX 200 tech shares slammed

The most richly-valued sector, tech, is arguably the most vulnerable to rising bond yields. This can be evidenced by the sea of red across most tech and growth related shares today. Most notably, the Afterpay Ltd (ASX: APT) share price has slumped nearly 7% to a 3-month low around the $110 level. Meanwhile, other large cap tech shares such as Xero Limited (ASX: XRO), WiseTech Global Ltd (ASX: WTC) and NextDC Ltd (ASX: NXT) have also ground lower. 

More reading

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• ASX 200 sinks, Xero reveals acquisition, ARB driven higher

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, and Facebook and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO, WiseTech Global, and Xero. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, Apple, and Facebook. 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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The EcoGraf Ltd (ASX: EGR) share price is racing higher following a favourable decision by the Australian Government. During late-morning trade, the graphite producer’s shares are up 5.8% to 63.5 cents.

Let’s take a closer look at what EcoGraf updated the ASX market with today.

What did EcoGraf announce?

The EcoGraf share price is on the move today as investors appear excited about the company’s progress.

In its announcement, EcoGraf advised that the Australian government has approved Major Project Status for the company’s battery anode material facility.

Located in Western Australia, the state-of-the-art processing facility when constructed, will produce battery anode material products. This will be treated through the company’s patented purification technology, which eliminates the use of toxic hydrofluoric acid.

In recent times, world governments have adopted new environmental, social and governance frameworks to help transition into cleaner energy.

EcoGraf noted that the Australian government recognises the importance of having a battery anode material facility in the country. Domestic production not only contributes to the growth of the critical minerals industry but also promotes other project developments.

It worth noting that this will be the first battery graphite processing facility to be established outside of China.

Words from the managing director

EcoGraf managing director Andrew Spinks commented on the favourable outcome:

We are delighted to receive this support from the Australian Government as our development is positioned as an integral part of the downstream modern manufacturing of battery and critical minerals in Australia.

EcoGraf’s development strongly aligns with recent legislative policy changes in Europe that require higher standards of environmental and social governance (ESG) in battery supply chains.

Unprecedented investment is currently underway to establish self-sufficient and sustainable battery manufacturing supply chains to support the electric vehicle industry.

EcoGraf share price snapshot

The EcoGraf share price has rocketed over 900% in the past year and is up an astonishing 252% year-to-date. The surge reflects growing investor confidence within the lithium-ion industry and company itself.

Based on the current valuations, EcoGraf commands a market capitalisation close to $273 million.

More reading

• The Ecograf (ASX:EGR) share price plummeted 17% today
• Why is the Ecograf (ASX:EGR) share price on a wild ride today?

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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ASX travel shares, including Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT), have taken a serious beating from the coronavirus pandemic.

Both companies plummeted to 52-week lows on 19 March last year and have struggled to recover as travel restrictions took hold and Australia and the world went into lockdown.

Over the past 12 months, the Flight Centre share price is still down 45.5%. The Qantas share price has gained more ground, but it still has another 2.9% to go to reach where it was a year ago.

Credit Suisse plugs Qantas and Flight Centre

According to today’s Australian Financial Review (AFR), Credit Suisse has positions in both Qantas and Flight Centre.

Here’s what Credit Suisse Private Banking portfolio manager Mike Jenneke had to say: 

These companies have very good hibernation strategies and that will see them through the present downturn. The vaccine news is positive and there’s risks obviously but when it’s safe to do so, it will recover.

Demand is pent up and we think we’ll see a pretty significant rebound in travel. These kind of stocks will be volatile but we think there is an overall opportunity there.

Struggling to touch pre-pandemic numbers

The AFR notes that while the S&P/ASX200 Index (XJO) has regained ground, the Qantas share price is 30% lower than pre-pandemic levels. AFR estimates that the Flight Centre share price is 60% lower.

Senior portfolio manager of American Century Investments, Brent Puff, said that since the air services industry was one of the hardest hit by COVID, he sees opportunity.

Mr Puff recently added Booking Holdings Inc (NASDAQ: BKNG) to his portfolio. He believes that the Booking.com business has a far way to recover and that pent up travellers will resume their regular habits once the vaccine widely circulates. 

Foolish takeaway

While ASX travel shares and the air services industry, in particular, put themselves back together in the aftermath of COVID, analysts see opportunity in the recovering companies. The expert advice to savvy investors is to keep an eye on updates on the vaccines and changes to travel restrictions.

More reading

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Gretchen Kennedy owns shares of Flight Centre Travel Group Limited and Qantas Airways Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Booking Holdings. The Motley Fool Australia has recommended Booking Holdings and 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.

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