The Webjet Limited (ASX: WEB) share price gained 4.2% today. That's enough to deliver shareholders over a 31% gain so far in August.
Webjet's share price has now rebounded 64% from this year's April 23 low. But that rebound has a long way to go before the company recovers from the massive hit it took as COVID-19 saw domestic and international travel grind to a virtual halt.
Despite the recent strong performance, year-to-date Webjet's share price is still down 61%.
Webjet is an S&P/ASX 200 (INDEXASX: XJO) listed company. By comparison the ASX 200 is down 8% since January 2.
What does Webjet do?
Headquartered in Melbourne, Webjet is a digital focused travel agency operating in Australia and New Zealand, with customers across global consumer and wholesale markets.
Webjet's business consists of a B2C division comprising the Webjet, Online Republic brands and WebBeds, and a B2B division comprising the Lots of Hotels and Sunhotels brands and FIT Ruums. The company's operations are primarily online/technology-based.
Webjet shares first listed on the ASX in 1997.
What's behind Webjet's 31% share price leap in August?
Webjet's 31% share price gains in August so far are even more remarkable when you take into account the company's 11% loss last Thursday.
That loss followed on from the release of Webjet's FY20 results, reporting a $143.6 million full-year loss.
Since Thursday's close Webjet's share price has rebounded 15%. That — and today's 4.2% share price gains — will come as sour news to the legion of investors betting against the company.
Yesterday, Webjet led the pack of most shorted shares on the ASX with a short interest of 13.1%. That tells me that some short covering — when investors buy back shares they've sold short to escape increasing losses when share prices move higher — is likely responsible for some of today's gains.
As for Webjet's 31% share price gain since the beginning of August, this follows the trend of investors looking beyond the viral global shutdowns and towards the reopening of national and international travel. A trend that's also seen big share price gains in August for companies like Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT).
When borders do fully reopen, it's the well-managed but still beaten down stocks in the travel and leisure industries that could offer some of the biggest share price gains.
