Corporate Travel Management shares zoomed 17% higher in November

The Corporate Travel Management Ltd (ASX:CTD) share price was on form in November. Here's why its shares smashed the market…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Corporate Travel Management Ltd (ASX: CTD) share price was one of the best performers on the ASX 200 in November.

During the month the corporate travel specialist's shares raced a massive 17% higher.

Why did the Corporate Travel Management share price race higher?

Investors were buying the company's shares last month following the release of a trading update at its annual general meeting.

Although that update revealed that trading conditions have been challenging in FY 2020, the company has been able to defy this by successfully executing its strategy.

As a result, managing director Jamie Pherous reaffirmed its full year underlying EBITDA guidance.

He advised that the company expects to deliver underlying EBITDA of between $165 million and $175 million in FY 2020. This represents growth of approximately 10% to 16.5% on the prior year.

Mr Pherous said: "It is of no surprise that the macro environment is challenging and we indicated in August we expected this to be the case. In the face of this, our management continues to execute our strategy which pleasingly enables me to affirm guidance."

The managing director then advised that the second half would be the strong half. This is because he expects this half to be stronger than normal due to an improvement in macroeconomic factors in Europe and Asia.

In addition to this, the company is cycling a strong first half of FY 2019. Whereas the second half will see it cycle a very weak comparable period, particularly during March and June.

Should you invest?

If Corporate Travel Management delivers on the top end of its guidance, I estimate that its shares are trading at 20x forward earnings today. I think that would make them very good value given its growth profile.

However, it is worth noting that the company remains a short seller target. If the short seller returns with another scathing attack in the near future, it could weigh heavily on its shares.

For this reason, investors looking for exposure to the travel industry might want to consider safer options such as Helloworld Travel Ltd (ASX: HLO) and Webjet Limited (ASX: WEB) instead.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. The Motley Fool Australia has recommended Helloworld Limited and Webjet Ltd. 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.

More on Share Gainers

A man looking at his laptop and thinking.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors were pulled back down to earth this Tuesday.

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why EML Payments, Gentrack, Regis, and Resimac shares are racing higher

These shares are outperforming on Tuesday. What's going on?

Read more »

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors kicked off the trading week in style today.

Read more »

Person pointing at an increasing blue graph which represents a rising share price.
Share Gainers

Why Liberty, Lovisa, Novonix, and SG Fleet shares are storming higher today

These shares are starting the week strongly. But why? Let's find out.

Read more »

Young girl drinking milk showing off muscles.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a great end to the trading week for ASX investors today.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

3 ASX 200 stocks smashing the benchmark this week

These three ASX 200 stocks are leading the charge this week. Here’s how.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why A2 Milk, EOS, GQG, and Mineral Resources shares are racing higher today

These shares are ending the week strongly. But why?

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »