1 ASX 200 share to buy before an effective COVID vaccine announcement

The whole world is waiting on an effective COVID vaccine. But once it’s announced this ASX 200 share won’t be the bargain it is today.
The post 1 ASX 200 share to buy before an effective COVID vaccine announcement appeared first on Motley Fool Australia. –

road sign saying opportunity ahead against sunny sky background

The whole world is waiting on an effective COVID vaccine. But if and when a proven vaccine arrives, the Flight Centre Travel Group Ltd (ASX: FLT) share price likely won’t be the bargain it is today.

Like most travel related shares – such as Webjet Limited (ASX: WEB) and Sydney Airport Holdings Pty Ltd (ASX: SYD) – Flight Centre’s share price was particularly hard hit from the fallout of the coronavirus.

From 21 February through to 19 March shares tumbled 75%. Flight Centre’s share price is up 52% since that low, but remains down 66% year-to-date.

By comparison the S&P/ASX 200 Index (ASX: XJO) is down 8% in 2020.

What does Flight Centre Travel Group do?

Flight Centre is one of the world’s largest travel agency groups. Its company-owned operations span more than 23 countries and its corporate travel management network covers more than 90 countries.

The company has a broad range of brands across its corporate, leisure and destination segments. These include Student Flights, Travel Money Oz, Corporate Traveller and Topdeck.

Flight Centre shares first began trading on the ASX in 1995.

Why buy shares in Flight Centre before a vaccine is proven?

As Benjamin Franklin famously quipped, “In this world, nothing is certain except death and taxes.”

So too, we can’t be certain that the world’s scientists will produce a highly effective vaccine to squash COVID-19 from our lives. But there are tremendous incentives for the leading pharmaceutical companies to do so. And they’re backed by unprecedented funding, cutting edge technology, and some of the best minds in the world.

So, while nothing is certain, I believe we’ll see a series of vaccines rolled out over the coming 12–24 months. The initial ones may only be 50% effective, as some clinical trials are already reporting. That’s a big step in the right direction, but not enough to reopen global travel. Or rejuvenate Flight Centre’s revenues and share price to early 2020 levels.

However, with time, the results will almost certainly improve. Remember, this global race for an effective vaccine only kicked off 7 months ago.

But the vast majority of investors don’t look ahead 2 or more years. They wait until good news is locked in and then invest, along with everyone else.

In this case the good news is a proven vaccine. And that news will likely trickle out over a period of months as it progresses through various trials. And with each new successful announcement leading ASX travel and leisure shares are likely to see renewed investor interest. Which is why, by the time such a vaccine is approved and in mass production, the biggest gains to be had from these shares will already be history.

As mentioned up top, Flight Centre’s share price is still down 66% from 2 January’s $39.52 per share. In my opinion, there’s no reason shares couldn’t be trading for $39.52 again once air travel returns to its pre-pandemic levels.

If they do, that would represent a 190% share price gain from yesterday’s closing price of $13.61. Should that eventuate, I imagine that’s worth waiting a few years for things to play out.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 1 ASX 200 share to buy before an effective COVID vaccine announcement appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!