June 15th, 2022 | 10:38 CEST
Turnaround on the horizon - TUI, Pathfinder Ventures, Lufthansa
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"[...] In addition to campsite fees, Pathfinder Ventures has put itself in a position to offer all of these sought-after camping solutions. The only thing they don't sell is the RV itself. [...]" Joe Bleackley, CEO, Pathfinder Ventures Inc.
Mallorca is only once a year
Prices are skyrocketing in the first summer without Corona requirements, and Germany's number one travel provider, TUI AG from Hanover, is expecting a "perfect" vacation season for Mallorca. In addition to Spain, demand is also rising in the most popular vacation destinations of Greece and Egypt, and prices are going through the roof. TUI spokesman Aage Dünhaupt expressed positive surprise at the enormous demand. "All planes going to the sun are currently full. I've never seen it like this before," he said at Palma airport on the sidelines of the christening of a new TUI Boeing 737-8 aircraft with space for 189 passengers named "Mallorca."
Back in May, TUI CEO Fritz Joussen expressed optimism. This year, the Group should at least return to the black in operational terms. "The crisis was difficult, but tourism is unbroken," the Company leader commented. On the other hand, the current chart of the TUI share is not at all optimistic. At EUR 1.83, the share marks a new low for the year. With the break below the EUR 2.00 mark, a new sell signal was also generated, which could result in a test of the Corona lows of EUR 1.25. In contrast, the analysts at Bernstein Research are more positive than the chart situation for the travel stock. Analyst Richard Clarke sees TUI as a "market performer" with a price target of EUR 2.50.
Pathfinder Ventures geared for growth
In contrast to hotel vacations, the camping industry experienced a real boom in the past two years due to the Corona restrictions. Booking portals are also expecting new records for the current year. Benefiting from the trend is Canadian campground operator Pathfinder Ventures, which launched an aggressive growth strategy ahead of the 2019 pandemic to acquire family-run parks and digitize its other service offerings. The focus is on family-friendly places in natural settings that offer existing recreational amenities. In addition, RV parks are to be offered as an additional source of revenue.
With three RV resort parks currently in operation in British Columbia in Canada, Pathfinder Ventures is focused on further expanding its network of upscale, family-friendly RV parks and campgrounds under the "Pathfinder Camp Resorts" brand. Expansion is expected to occur through acquisitions of entire "recreation vehicle" (RV) parks or through purchasing lands and new construction in Canada and the United States.
Looking at the peer group, Pathfinder, with a market capitalization of around EUR 5 million, is the speedboat compared to heavyweights such as Sun Communities with a market capitalization of around EUR 14 billion or Equity Lifestyle Properties with almost EUR 10 billion. What is striking is the favorable valuation with a price-to-sales ratio of 2.27 in contrast to the competition, which has an average P/S ratio of 8. Thus, Pathfinder Ventures, which is still in the red due to its aggressive growth strategy, has enormous catch-up potential. The Company's share price, listed in Toronto and Frankfurt, is EUR 0.09. The all-time high was around 50% higher last October.
Surprisingly strong demand
The enormous demand for travel could prompt Lufthansa AG's management team to rethink its approach because there is a shortage at the Crane. In addition to a lack of personnel on the ground and in the air, the number of seats on the aircraft are also insufficient to transport the crowds to the appropriate travel destinations. Because of this, Lufthansa CEO Carsten Spohr is considering reactivating the Airbus A380 for long-haul routes, according to aviation portal aero.de. A short time ago, the Company leader commented on a return campaign to the "Spiegel": "It will not come back at Lufthansa." According to information from aero.de, Lufthansa is considering reactivating four or even all eight remaining A380s from the storage in Teruel "as soon as possible" for North American traffic.
Although demand for flights is booming this year, Lufthansa shares are also facing a retest of the March 2020 Corona lows at EUR 4.90, similar to tour operator TUI. Indicators such as the relative strength index also point to a further nosedive for the crane.
Despite the boom in travel bookings for the summer, travel stocks TUI and Lufthansa are about to mark new lows. Pathfinder Ventures, on the other hand, is betting on the booming camping market and is growing thanks to its aggressive acquisition strategy.
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