Travel stocks ready to shoot up? That’s what we’ll look at today.
Promising vaccine news was released overnight, and perhaps a glimmer of hope emerged for these beaten-down companies.
Pfizer Inc [NYSE:PFE] — one of the world’s largest pharmaceutical companies — announced a possible vaccine for COVID-19.
The world and especially the travel industry saw this is as excellent news, and caused Flight Centre Travel Group Ltd [ASX:FLT] to jump 12.25% to trade at $16.13.
Sydney Airport [ASX:SYD] also jumped 13.08% to trade at $6.83 at the time of writing.
COVID-19 and the travel sector
It’s been a horror year for many businesses, but few have been hit as hard as the travel sector.
Like a freight train coming to an abrupt halt, the impact of the sudden stop in travel caused a steep plunge in these companies’ values.
Flight Centre, Sydney Airport, Webjet Ltd [ASX:WEB], Crown Resorts Ltd [ASX:CWN] — the list goes on.
Every company in this sector found themselves scrambling to survive. Many opted for capital raises to shore up their balance sheets. This was coupled with a long list of global airlines that either went into bankruptcy or had to take government bail-outs.
Today Pfizer announced they have created a vaccine which may be 90% effective in stopping the transmission of the deadly virus.
If this proves to be true, then we may be on the road out of this mess.
For travel companies, this news could not have come at a better time.
So, talk of a solution is a very welcome boost for the industry.
In Melbourne, gaming operations are expected to commence from Thursday, 12 November at Crown Casino.
There’s a whole ecosystem of companies out there that thrive on the movement of people.
SYD’s and FLT’s rallies may prove to be false dawns, but we will watch these rallies closely.
That being said, what certainly is front and centre of investors’ minds right now is e-commerce and safety technology.
Get the names of four small-cap stocks in these industries here.
For Money Morning