Future Generation Virtual Investment Forum - Portfolio Manager, Kelli Meagher
COMPANY
Corporate Travel Management
TICKER
ASX: CTD
SECTOR
Corporate Travel
Corporate Travel Management (ASX: CTD) provides business travel management services for companies globally. Its suite of technology tools makes it easier and cheaper to book flights, accommodation and generally manage staff travel.
Like all companies related to travel, CTD has suffered a huge hit in earnings and share price since the global pandemic began. However, we believe the worst has now passed. With COVID-19 case numbers more manageable, a vaccine on the horizon and wide-spread rapid testing increasing, including at airports, the world will likely start adopting more of a “live with it” approach. As restrictions ease and people become more confident about travelling, they will be more inclined to finally take that business trip, as there is only so much you can do over Zoom. In addition, companies will need corporate travel management services more than ever before to navigate what is likely to be a more complex “new normal” travel environment.
CTD also stands to benefit from industry consolidation. The global corporate travel market is highly fragmented, with many small and medium sized players who are currently under financial pressure and looking to sell. With its strong balance sheet and experienced management team, CTD is in prime position to take advantage of these opportunities. The company has a good track record of both organic growth and integrating and extracting value from acquisitions. It recently made a large acquisition in the US which complements its existing business and significantly increases its scale. This will allow them to add more customers to their existing technology platform, which means higher margins and a strategically stronger position to win new clients.
Obviously, the trajectory of COVID-19 and the timeline for a successful vaccine is unpredictable. Prolonged restrictions on travel within country and internationally would slow down CTD’s share price recovery, but with its flexible cost base and strong balance sheet, CTD is well placed to ride out any bumps along the road to recovery.
This information has been prepared and provided by Sage Capital. To the extent that includes any financial product advice, the advice is of a general nature only and does not take into account any individual’s objectives, financial situation or particular needs. Before making an investment decision an individual should assess whether it meets their own needs and consult a financial advisor. This stock pick was published on 15 October 2020 and is subject to change.
This information is for professional and wholesale investors only and has been prepared by Sage Capital Pty Ltd ACN 632 839 877 AR No. 001276472 (‘Sage Capital’). Channel Investment Management Limited ACN 163 234 240 AFSL 439007 (‘CIML’) is the responsible entity and issuer of units in the CC Sage Capital Equity Plus Fund ARSN 634 148 913 and the CC Sage Capital Absolute Return Fund ARSN 634 149 287 (collectively ‘the Funds’). Channel Capital Pty Ltd ACN 162 591 568 AR No. 001274413 (‘Channel’) provides investment infrastructure services for Sage Capital and is the holding company of CIML. This information is supplied on the following conditions which are expressly accepted and agreed to by each interested party (‘Recipient’).
This information contains general financial product advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person. It is intended solely for wholesale clients (including sophisticated investors) as defined under sections 761G and 761GA of the Corporations Act 2001 (Cth).
The information provided should not be considered personal advice, a recommendation, or an offer to invest in the Funds. Recipients should not rely on this information in making investment decisions. A Recipient should, before making any investment decisions, consider the appropriateness of the information, and seek professional advice.
Neither Sage Capital, Channel, CIML or their representatives and respective employees or officers (collectively, ‘the Beneficiaries’) make any representation or warranty, express or implied, as to accuracy, reliability or completeness of this information or subsequently provided to the Recipient or its advisers by any of the Beneficiaries, including, without limitation, any historical financial information, the estimates and projections and any other financial information derived there from, and nothing contained in this information is, or shall be relied upon, as a promise or representation, whether as to the past or the future. All investments contain risk. Past performance is not a reliable indicator of future performance.
For further information and before investing, please read the Product Disclosure Statement and Target Market Determination which is available from
www.channelcapital.com.au
