Why Flight Centre’s share price could continue to soar
Since August 20 this year to the time of writing, Flight Centre’s (ASX:FLT) share price has risen almost 66 per cent, from $13.74 to $22.90. It’s been spurred on by investors wanting to profit from the reopening of travel, particularly outbound international travel. And despite being heavily shorted, I believe there are some compelling reasons why the share price has further to run.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
paul
:
FLT I believe issued 77% more shares for the captial raising meaning $23/ share is close to the old $41. Right? Thats damn high ignoring the euphoric near $60 which isnt worth counting.
Roger Montgomery
:
Hey Paul, That’s not quite how we’d measure the impact. It looks elegant but it fails to account for a bunch of things including a lower cost base, impact on ROE from taking market share etc…Much better to examine the impact on equity per share and then incorporate the future expected ROE. Of course all bets are off if another more virulent strain of the virus breaks out!