Global Trends Point to This Low-Cost App Giant

Pandemic restrictions are ending globally, which points to a potential revival, however slowly, of global travel. While some may be wary of international travel, others may be sick of staying at home or traveling domestically.

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  • Either way, those trends bode well for the larger travel and tourism industry. With business picking up, the fundamentals of many companies will likely improve, leading to higher share prices for those stocks.

    One big potential winner here is Airbnb (ABNB). Many who resume traveling may want to avoid the crowds of hotels, and selecting properties with limited access to others sounds attractive in the immediate post-pandemic travel environment. That’s likely why shares are getting upgraded.

    It also helps that shares are down about 40 percent from their peak set in February. As one of the hottest potential IPOs of the past few years, the company delayed going public until the market was roaring higher. Now, shares are back to near their IPO price, and look attractive for a post-pandemic resurgence in travel.

    Action to take: Shares look attractive under $150, for those willing to buy and hold for a few years. Looking at the chart, shares appear to have stopped their multi-month decline. While that may not portend an immediate move higher, a call option trade is far cheaper than buying actual shares.

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  • The October $160 calls, last going for about $7.35, look capable of a mid-double-digit move higher if shares move higher over the summer. That looks like a reasonable bet as more data on travel trends come in.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may make a trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.