After the spectacular Sealink float, 6 tourism stocks to watch

Sealink yesterday rewarded investors in the float with a 37% first-day return.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A report by consultancy firm Deloitte gave a helicopter view of six ‘super sectors’ that will grow faster than the rest of the global economy. Australia has unique advantages pertaining to all of them. One of those sectors was tourism, which should benefit from the influx of increasing Asian visitors.

A prior report identified Sealink Travel Group (ASX: SLK) in particular and suggested that stocks worthy of equal consideration were Sydney Airport (ASX: SYD) for strong international passenger growth, Ardent Leisure (ASX: AAD) for rising attendance at its premium leisure assets, Flight Centre (ASX: FLT) for airfares within Australia and Crown (ASX: CWN) for casino patronage in Melbourne, Perth and ultimately Sydney.

Sealink yesterday rewarded investors in the float with a 37% first day return. The Managing Director Jeff Ellison told the Australian Financial Review that whatever worries are plaguing the wider world (such as the current US government shutdown), Sealink’s fundamentals and direction are the main drivers.

Two additional tourism-related stocks

  • Echo Entertainment Group (ASX: EGP) for its exposure to Asian tourism to Queensland, where it holds three of the four casinos.
  • Webjet (ASX: WEB) should benefit from its March 2013 acquisition of Zuji, an online travel agency dealing in air ticket sales in Hong Kong and Singapore. Additionally, it will prosper by enabling customers to build their own travel packages of not only flights but also accommodation, car rental and travel insurance. 

Foolish takeaway

The first point is to identify growth sectors and then invest in stocks within those sectors that have company specific advantages.

In spite of some very successful recent floats, caution is still advised in reviewing both the quality of management and the tendency of private equity firms selling out at inflated prices. The Myer (ASX: MYR) float is a case in point — a company operating in the wrong sector that was sold by the wrong type of vendor.

Finally, while the ship may have sailed on the Sealink float, the new ASX BookBuild facility is now an alternative for floats. This will allow ordinary investors to contact their own brokers and participate in the majority of new floats or capital raisings.

If tourism stocks don’t sound very appealing, discover The Motley Fool’s favorite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading


Motley Fool contributor Mark Woodruff does not own shares in any of the companies mentioned in this article.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »