Hello Guys, being new to the topic of investing and the research into a company that comes with it, I see here a share of Thomas Cook that is confusing me.
Brilliant advances in the share price while profits tank away, debt stays high, revenue is generated by having elements of sales to leaseback activity which means less free cashflow in the future and the list goes on. Not to forget a slain on book value less than half from 2011 and being at even roughly a quarter what the company has been 2010. Then finally the cut back of a dividend for me is the cherry on top.
So I do wonder whether I am missing something or have a too pessimistic idea of the company. As mentioned I am new to the topic and I am happy for every slap in the neck that helps me to understand the situation better for the future. Thank you in advance!
Christian
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Thomas Cook Group plc operates under six geographic segments: UK, Central Europe, West & East Europe, Northern Europe, North America and Airlines Germany. In the United Kingdom & Ireland, India and Middle East it has 7.8 million passengers, which includes Includes 1.2 million passengers in India and Egypt, 1,103 of retail outlets, which Includes 326 retail outlets in India and Egypt and 40 aircrafts. It brands include Thomas Cook, Neilson, Sunset, Airtours, Elegant Resorts, Cresta, GoldMedal, and medhotels.com. In March 2012, it sold its rights in the Explorers Hotel (Explorers) to Verquin SAS. In August 2012, it completed the sale and leaseback of 11 Boeing 757 aircraft and eight Boeing 767 aircraft. In May 2013, the Company disposed Thomas Cook Canada Inc. and Thomas Cook USA Holdings, Inc., together known as Thomas Cook North America, to Red Label Vacations Inc. more »
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Hi! I'm by no way an expert on the detail of Thomas Cook but considering that a year ago (indeed as recently as March this year) the industry, and the company, was raising the serious prospect of it going bust, something's gone right. Harriet Green arrived as CEO in the summer and there seems to be some belief that she's getting a grip of the situation. But she's got some serious work to do. You're right, the numbers are really messy at the moment.
As for the recent price rise, a load of brokers, including Morgan Stanley and UBS, uprated the stock in early December. That combined with director dealings and a couple of institutions buying the stock, could be the answer there.
The quality indicators aren't great- I took a punt on them late last year and bought a few thousand of them whilst they were around 13p. Sold them off in August this year but regret doing this now as they are at 45p.
IMO I doubt that they will be going back down to where they were but it is a risky stock nevertheless.