What do you think about TUI?

With the decreasing numbers about covid infection. And International travelling (vacation) that is starting up again. What are your thoughts on TUI?

I have TUI in my portfolio since a few months, of course for the same reason. It’s (one of) the largest travel companies in the world and I expect international traveling to explode once it’s possible to travel without restrictions again. My target is ~pre Covid value which is still around +35% from todays price.

What are your thoughts on TUI?

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I agree…I have also TUI in my portfolio…I hope when everybody is vaccinated TUI will go up 35-50%…

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Ik heb ook tui sinds een paar maanden in mijn portfolio. Ik zelf verwacht dat ze richting de 8 euro gaan op het moment dat alles en iedereen is gevaccineerd en alle landen weer open mogen!

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Ik heb onlangs TUI groot ingekocht voor de lange termijn, dividend is nu even stopgezet maar over een paar jaar verwacht ik dat de reisbranche grotendeels weer hersteld is en dat het dividendpercentage t.o.v. de prijs waar ik ze nu voor koop tussen de 10-15% zal liggen.

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While I fully agree that carriers like Tui will rebound over time, I also think it might take longer then “just when the vaccinations are done”.

Over the past year or more, people have gotten used to being more “alone” and maintaining some form of distance to others.
Are you going to be comfortable being crammed into a metal tube with 150 other people coughing, sneezing and breathing on eachother?
Or are you going to find somewhere closer to home where you can go on holiday and take your own car?

There might me an attitude shift that needs to be overcome before things go back to normal again.

And also, don’t forget tons of people have (compulsory) vouchers for holidays that got cancelled in the last year so companies like Tui won’t make much/any money from that, they will only be spending.

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And that’s not all. Think about the immense debt they’ve gotten themselves into. TUI won’t be the same after COVID is done. It’s going to take many years for them to repay all of that debt.

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I have a few as well, I bought them low, currently +35% and I think it will go up a bit more in a few years time.

People will always go on holiday, there is nothing that could replace that activity in my opinion. TUI is more than a flight operator, they own a lot of hotels and resorts as well.

They did get a lot of financial support from the German government to get them through the crisis and made a lot of debts. So I agree that it will take a long(er) time for them to recover.

Curious to see what will happen in the next years

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TUI will be back, but it will take time. That’s for sure.

Same for other European airlines. Blame the European Union for slow vaccinations.
Compared to American Airlines, EU airlines are really behind.

Please be patient, People need and wants to fly more than ever. Even when Skype, Zoom or any video-call platform is getting bigger.

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@TripleD and @Chris
As much as I agree with the fact that people will always want to travel, I believe companies like cruise lines, tour operators, rental car companies and many airlines are value traps at this point in time. They appear to be bargains, but their net debt-to-EBITDA ratio is beyond poor (to put it very mildly!). Many of these companies are technically insolvable, or technically bankrupt, but are surviving by the skin of their teeth due to substantial loans (private and state sponsored), because they issued new shares (causing share dilution), because they slashed dividends or because they sold parts of their business. Like with crypto’s, investor emotions will be the first thing to push the stock price, but I firmly believe the stock price will subsequently either drop (when earnings reports are presented) or stagnate for quite some time until the debt is significantly decreased.

Take Inbev as an example. Years ago, in 2015, they bought SABMiller and inherited a lot of debt, causing the share price to sink and stagnate for some time. It isn’t until now that the share price is slowly growing again. Also look at General Electric. They got into a lot of debt, for example due to their airplane leasing plan. It isn’t until now, that after years of cutting dividend ($0,01 per share, I kid you not…) and serious cost cutting that the share price is increasing again because debt is slowly decreasing. However, it’s still going to take them many years to get back to their all-time high.

What I’m saying is: don’t fall for the value trap, it may disappoint you in the end.

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I do agree with @Cashcow and @JPeters . Next to that Tui is declining in stock price since 2000, 2008, 2018 and hardly recovering from those highs. What’s the reason behind that? In my opinion they won’t bring dividend back anytime soon. And their recovery will take quiet some time. There are better reopening stocks to own atm. Why don’t you go for Airbus or Boeing? I see a bigger long term potential for them. Disney looks good too, although some might say it’s a bit overvalued right now (maybe buy into a dip).

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I’m not interested in dividend or short. To me, it’s all long-term. I do agree that airlines are having problems in terms of cashflow. But thanks to Covid this might change in the future.
If not, hopefully my tech stocks will go up :rofl:. The world need chips.

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