Who is still holding this from $14?, page-13

Not webjet’s fault that TC collapsed but I think some here do t understand the nature of the web/TC agreement and why webjet did it and what they have gained from it.

the reality is that Webjet wanted a way into Europe for web beds and the TC agreement was a purchase of thousands of b2b hotel bed contracts, for which the only catch was they had to sell them to TC at a discount. The good aspect of this is that web was able to rely on the large volume of TC customers, so they will take a short term hit from those bookings from this year that TC will default on, and they don’t have the short term guaranteed volume of sales on their 3,000 bed contracts.

but in the long term, the fact that they aren’t bound by the lower margin TC agreement means that they can sell the beds at full margin to 3rd parties.

hence the whole thing seems overblown in respect to the investment thesis and medium-long term prospects of webjet especially their b2b segment.

if I look back 12months ago and compare what we knew then to now, I am happier with the outlook now for webjet than I was even then given the excellent execution of the dotw acquisition and integration thus far, the great continued growth of web beds, the stabilisation of b2c and online republic, and the new announcement of a further long term growth driver in umrah holidays. They have reiterated their drive for margin expansion over the next 3 years from 8/4/4 to 8/3/3, which will thus expand profits 25-30% in itself. They are using rezchain to both decrease costs and exact synergies.
they have reiterated that they will be looking for further strategic acquisitions since the b2b sector is undergoing a period of consolidation from many small fragmented players to a relative oligopoly with web being global number 2 and the fastest growing player.
Meanwhile global travel numbers are up and the aud XR has dropped lower.

the only genuine concern for me (as I’ve mentioned previously), is the slowing in global growth and the effect this would have on travel spending if there was a global recession. My current outlook is that the extreme QE by central banks and fiscal expansion by govts will lead to a period of softness but no near term recession or financial crash.

furthermore, the lower cash rate by definition pushes investors out along the risk curve as the return from cash and fixed interest declines, thus growth stocks such as webjet have their valuations increased according to DCF analyses where they’re forward cashflows will be less discounted as interest rates decrease, thus re rating valuations upwards.

so the fact that webjet is trading close to $10 is in my humble opinion a rare opportunity to back the truck up, which is exactly what I’ll be doing once I see a bottom form on the chart.

i doubt we will see prices below 9.50 but it’s impossible to predict prices and a Fool’s errand to attempt to do so as I’ve learned before by being too early on webjet and other stocks , so I will wait for the sellers to dry up even if that means I don’t get to pick the exact bottom.

of course there are unknown unknowns going forward, but assuming markets haven’t crashed and based the known knowns I can’t see this trading below 12.00 in 12months and 14.00 in 2-3 years (plus dividends).