Bottom Line: This end of summer slump is no good reason to abandon ship
27 September 2013 2:16am
THOMAS Cook’s turnaround has been remarkable. In just 12 months its share price has skyrocketed from 15.5p to yesterday’s close of 145.3p – a dramatic 837 per cent rise after a turbulent two years full of emergency loans and profit warnings.
After such a stellar run there was bound to be a bump in the road, and yesterday was it.
Though the firm’s profit outlook remains firmly on track, the warning of a slow start to winter bookings – as well as concerns over political instability in some key destinations – clearly had investors spooked. It didn’t help that rival Tui sounded a decidedly less cautious note – sparking a kneejerk switch between the stocks that sent Tui flying.
But investors should get some perspective. Thomas Cook shares were touching 170p back in August and there’s no reason they can’t recover to that level again. In the meantime, a brief slump offers the perfect opportunity to get on board.