Flight Centre Travel Group Ltd (ASX: FLT) has fallen below $50 for the first time in three months, following an 11% plunge in the share price between March 11 and Friday's close.
The fall appears to be a result of some investors taking winnings after an amazing five-year period that has seen the share price rise nearly 600% from under $8 in early 2009.
Stocks with strong growth profiles and quickly expanding share prices have suffered recently following a retreat from so-called 'momentum' stocks in the US. While Australian stocks didn't fare too badly compared with the types of falls seen on Wall Street, companies such as Flight Centre, Carsales.com Limited (ASX: CRZ) and SEEK Limited (ASX: SEK) have all seen modest falls.
Is now the time to buy?
Flight Centre remains an excellent business, it's just that Mr Market is now willing to offer you a share of the company for 11% less than he was a couple of months ago. Flight Centre has a presence in 11 countries and expects to continue growing quickly for many years yet.
Growth to Continue
In fact, the recent results forced some brokers to increase growth expectations for the coming years. Earnings per share growth in the low-to-mid teens for the next three to four years is not out of the question, and based on current estimates the company is trading on around 16 times FY15 earnings.
Power of the Brand
Finally, one must not underestimate the power of the brand that Flight Centre has built in Australia and overseas. Anyone who watches television will know the company's jingle and associate the company with the vision of a smiling sales assistant. This is important as it grows brand trust and makes Flight Centre one of the first stops any traveller will check out. Now appears as good a time as any to take a stake in one of Australia's best and brightest companies.
