Cover-More Group Ltd (ASX: CVO) has enjoyed a tremendous run over the last four months, climbing 38% from a low of $1.79 to close at a record high of $2.47 on Friday.
Cover-More is Australia's largest provider of travel insurance with an approximate 40% share of the local market. Investors were quite bearish on the company's prospects as a result of the plummeting Australian dollar (which many believed would impact outbound travel rates), although the market now seems to be more comfortable with the situation.
Investors should note that outbound travel rates have remained strong historically even through events such as the Global Financial Crisis, the outbreak of various viruses and terrorist attacks such as September 11.
At a recent investor presentation, Cover-More confirmed that it was experiencing strong group sales growth for the second half of 2015 compared to the prior corresponding period while it also said that "a new, more diverse, sophisticated and profitable Cover-More is emerging". At the same time, the sales growth rate through new partner Insurance Australia Group Ltd (ASX: IAG) was also traveling ahead of that recorded in the first half.
Although Cover-More Group's shares aren't as cheap as they were back in February, they still pose as a good opportunity for investors focused on the long-term — especially considering its growth prospects in the key markets of China and India. In saying that however, there are a number of other stocks which I believe represent even greater buys today.
