Are ASX travel shares like Qantas Airways Limited (ASX: QAN) great value because of the coronavirus share market selloff?

Plenty of other ASX travel shares have seen dramatic declines like Webjet Limited (ASX: WEB), Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT).

There’s a lot of conflicting thoughts about whether they’re buys or not. It can be clever to buy when there’s ‘blood in the streets’. But there’s a major reason why they’re trading so much lower. International travel has almost completely stopped. Domestic travel is also very limited right now.

However, remember that many of the ASX travel shares don’t need international travel to resume. Domestic travel in Australia (and domestic travel in other regions) is expected to resume much sooner. If Aussie travellers simply go to another state rather than another country, then Qantas, Webjet and so on can still get a lot of their volume back.

Has there been any news for ASX travel shares recently?

Yesterday we learned that the EU wants to lift travel restrictions so that there can be a tourist season this year. Austria and Germany are the latest countries to remove travel limits. On 15 June 2020 free movement of people within the EU should return. I think it’s a positive move. But of course this is going to be dependent on staying in control of the coronavirus. 

But today we also heard from the CEO of International Air Transport Association, Alexandre de Juniac, who said that normal international travel may not be back until 2023. I think that could be tough for ASX travel shares.

I’m not sure that every travel share is good value at the moment. There has been a big shift to business video calling during this period. I believe something like Corporate Travel may not see as quick of a recovery.

But if I were targeting ASX travel shares then I’d look at Webjet and Qantas first. I think domestic travel will return sooner rather than later, which will mean some earnings can recover and sentiment may return further for the share price. Don’t forget that the RBA interest rate is now very low, which boosts asset prices.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ABS reveals overseas travel arrivals plummeted a massive 99% in April
• ASX stock of the day: This ASX airline share jumped 45% today on expansion speculation
• Regional Express soars 45% higher amid plans to take on Qantas and Virgin Australia
• The smartest ASX shares to buy if you have $2,000

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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On Wednesday I looked at how a $10,000 investment in the CSL Limited (ASX: CSL) IPO in 1994 would have fared. Spoiler alert, you’d be very wealthy now.

Today I thought I would turn my attention to fellow market darling, Afterpay Ltd (ASX: APT).

The buy now pay later provider hasn’t been listed on the Australian share market anywhere near as long as CSL, but it certainly has achieved a lot during this time.

For example, here’s me fawning over Afterpay in July 2016 when it was just starting to gain traction with a handful of retailers in Australia.

Fast-forward to its recent business update and Afterpay now has a total of 48,400 merchants on its platform. This comprises 38,600 merchants in the ANZ market, 9,100 in the U.S. market, and 600 in the UK.

In addition to this, there are now a whopping 8.4 million active customers transacting through its platform globally. A sizeable 4.4 million of these are in the U.S. market.

The Afterpay IPO.

Afterpay has been listed on the Australian share market for just a touch over four years. Its shares landed on the ASX boards on May 4 2016 for $1.00 per share. This gave it a market capitalisation of $125 million.

This means that a $10,000 investment in its IPO would have yielded you 10,000 shares.

And although the company has merged with Touchcorp since then, Afterpay shareholders were given one share in the new entity for every share they already owned. So this figure remains the same.

Today the payments company’s shares are changing hands for $43.46, which implies a market capitalisation of approximately $11.6 billion.

This means that those 10,000 shares now have a market value of $434,600. I think you’ll agree that this is a stunning return on investment in just four years.

And given its strong growth potential, I wouldn’t be in a hurry to cash in these shares just yet. Especially if Tencent Holdings opens the door to the Asia market for it in the future. Combined with its other expansion opportunities in North America and Europe, the future looks very bright for this star stock.

More reading

• 3 top ASX shares to buy now and hold for 10 years
• Is the Zip share price in the buy zone?
• If you invested $10,000 in the CSL IPO, this is how much you’d have now
• How to become a better investor in just 2 minutes
• 4 top ASX shares to invest $4,000 into immediately

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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