On Tuesday, shares in accommodation and hotel operator Mantra Group Ltd (ASX: MTR) sunk as low as $3.04 during the trading session, marking a new 52-week low, before closing down 7.7% at $3.14.
Based on yesterday's closing price the stock has now fallen a total of 38% in calendar year 2016 and is trading at levels last seen in early 2015.
So could Mantra's shares now be in value territory or could more falls lie ahead?
According to analyst consensus data provided by Reuters, the consensus estimate from 10 analysts is for the group to earn 16.6 cents per share (cps) in financial year (FY) 2016 and 19.3 cps in FY 2017.
At $3.14 this implies a price-to-earnings ratio of around 19 times and 16 times respectively.
Based on the FY 2017 forecast the pricing of Mantra could be starting to look appealing and further falls may be limited.
Here are three reasons to be bullish on the group's prospects.
- Mantra owns high quality assets and is Australia's leading accommodation provider with over $7 billion in assets under management
- The group operates under three well-known brands – Peppers, Mantra and BreakFree
- The group achieves gross operating profits of over 50%
There are numerous ways to gain exposure to the tourism theme which appears to be one of the few bright spots within the domestic economy. While some investors have been buying shares in companies like Qantas Airways Limited (ASX: QAN) and leisure and theme park operator Ardent Leisure Group (ASX: AAD) for exposure to this thematic, at current prices Mantra could be a more appealing opportunity to investigate.
