Buying up ASX travel shares amid the initial COVID-19 panic in March 2020 served those investors pretty well.
So with the same mindset, one could repeat and rinse during the current Omicron-induced ASX dip.
Shaw and Partners portfolio manager James Gerrish, writing in his newsletter Market Matters (MM), certainly thinks so.
“MM believes it’s time to start considering the out of favour travel and tourism stocks,” he said.
“Don’t forget how quickly things have changed through 2021!”
Here are 3 ASX shares Gerrish suggested considering:
ASX travel shares are on sale right now
“But it depends on price and risk appetite, with the last 2 likely to have more upside potential,” he said.
“That is, less capital required for the same result.”
All 3 are undoubtedly selling at a discount at the moment.
Over the past month, Corporate Travel shares have lost around 15%, Webjet has sunk 18%, and Flight Centre dived almost 15%.
Corporate Travel shares on Thursday morning were going for $21.32. Gerrish would pounce if it dipped below the $20 mark.
Webjet has been discounted close to 24% since it hit a 52-week high early last month.
“Omicron [is] clearly causing acceleration towards the downside,” said Gerrish.
“We like Webjet under $5 but I would leave some ammunition to average under $4.50 if the virus outlook deteriorates further.”
Flight Centre shares lost another 1.78% on Thursday morning to trade at $17.11. Its 52-week high of $25.28 in October now seems like a distant memory.
“As we saw from the 85% rally from its August low, the stock’s good value into current weakness when we can finally start packing our bags,” said Gerrish.
“I have planned a quick trip up to Hamilton mid next year but I didn’t consider anything overseas. I imagine many people are the same … looking at how little accommodation is left domestically.”
He added that the Flight Centre share price could drop another 10% to 20%, but it would eventually rise again.
“I do believe it will be well above $20 at some stage in 2022,” Gerrish said.
“The risk-reward is becoming appealing.”