Flight Centre (FLT) was forced to raise capital through COVID, in its case to the tune of ~$700mn which also significantly increased the number of shares on the register in the process. The stock has failed to capture investors imagination post-COVID with the stock still trading well under its 2021 high. – we see no reason to fight this underperformance. Professional traders clearly agree with our thoughts with FLT carrying the largest market short at 11.85% although it’s well down on the 18.5% position held last May.
Founder Geoff Harris recently sold $16mnn worth of stock but considering insiders hold ~20% of the company it’s not a meaningful move perhaps just time to upgrade the weekend getaway. In January the company successfully raised $180mn at $14.60 to enter the luxury UK & US travel market demonstrating plenty of appetite at lower levels, perhaps some shorts got nervous.
- We prefer to remain with the strength in today’s market and that’s not FLT at this stage of the cycle.
MM is neutral toward FLT
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