'Powerful trend': The ASX stock cashing in from customers who don't care about interest rates

Here's a company that has clients whose spending power has not diminished from rising mortgage repayments.

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There is much talk about how much Australian consumers and businesses are struggling under the weight of 12 interest rate rises since May last year.

And there is absolutely no doubt many Aussies are feeling the pinch.

However, what if you were told there is an ASX stock that's reliant on a client base largely unaffected by pesky things such as onerous mortgage repayments, or even high unemployment?

That sounds perfect for the current economic climate, doesn't it?

Well, the experts at Elvest Fund are invested in one such stock that's going for a tidy discount at the moment:

'We're not wringing our hands'

Helloworld Travel Ltd (ASX: HLO) has been one of the hottest ASX stocks this year, pretty much doubling since New Year's Day.

However, the share price has tumbled 17.8% since the start of September.

Elvest analysts explained that the travel sector was heavily sold off over the past month due to "higher bond yields and fuel prices".

But, in a memo to clients, they didn't express any worry about Helloworld's longer term prospects.

"Whilst we acknowledge the dampening effect on travel demand, we're not wringing our hands over these macro concerns. 

"Given pent up demand and improving capacity, the post-pandemic recovery in leisure travel is a powerful trend that will likely continue through 2024 and 2025."

So, as far as they're concerned, the current dip is a buying opportunity.

"Helloworld is well positioned with $100 million in net cash and Corporate Travel Management Ltd (ASX: CTD) shares on the balance sheet."

Customers that are immune to rising mortgage repayments

On top of that, the company has a stunning ace up its sleeve. Its clientele is largely immune to the current economic headwinds.

"[Helloworld] serves a largely over 50s — and relatively mortgage-free — customer base," read the Elvest memo.

"Excluding cash and securities, the enterprise trades at less than 5 times FY24 EBITDA guidance of $64 to $72 million."

And a sneaky bonus for investors is that Helloworld is currently paying out a 3.1% fully franked dividend yield.

Other professional investors unanimously agree with the Elvest team's bullishness.

CMC Markets currently shows all five analysts that cover Helloworld recommend it as a buy.

Motley Fool contributor Tony Yoo has positions in Corporate Travel Management. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Corporate Travel Management and Helloworld Travel. The Motley Fool Australia has recommended Corporate Travel Management. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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