ON THE BEACH (OTB) 446.5p
Loss to date: 11.6% Original entry point: Buy at 505p, 30 August 2018
ONLINE BEACH holidays retailer On The Beach (OTB) has been hit by troubles in the sector as the shares have reversed more than 11% to 446.5p since we flagged it as a compelling opportunity.
Shares in tour operators Thomas Cook (TCG) and TUI (TUI) are also in a downward spiral with the former serving up a big profit warning.
It appears the sector cannot shake off concerns over trading after the blistering summer weather deterred people from booking an overseas holiday.
Peel Hunt analyst Ivor Jones argues the absence of an October trading statement despite the unusual summer implies trading is on track.
‘If there is to be disruption to the travel market [from Brexit] we do not expect On The Beach to be immune, but do expect it to fare better than competitors with high fixed costs and emerge with an enhanced market share,’ comments Jones.
On The Beach’s recent acquisition of Classic Collection, a business-to-business distribution network, which sells premium holidays, should offer a new growth opportunity.
We think the fall in the share price is due to negative sentiment in the sector rather than a poor operational performance.