This article was written in English on 19.03.2021, translated and published on this site.
In the first months after the COVID-19 outbreak, most investors moved away from travel stakes, mainly airlines. However, with the improvement in investor sentiment, the share prices of these companies have also recovered.
A Cheap Airline Serving Niche Markets
Bulgaria-based Wizz Air started its operations in 2003 as an airline offering low prices. Since then, the company has focused on the relatively lower serviced central and eastern European markets.
Wizz Air also operates flights to many cities in Europe, as well as to some destinations in North Africa and the Middle East. Since its first voyage in 2004, the company has carried over 200 million passengers across 44 countries.
The company’s low-priced and basic services system is based on buying tickets directly from the website or application and making additional payments for additional services that may be needed.
The management aims to create a sustainable travel company that seeks to reduce its environmental footprint. This environmental element also attracts the attention of investors who attach importance to “Environmental, Social and Corporate Governance” (ESG) factors.
Airline stocks have found a sensitive audience in recent months, and the rise in stock prices is proof of this. “I’ve been vaccinated, I’ll travel” will probably be one of the most popular quotes in the coming months, and travel companies will see a cumulative boom in demand as travel restrictions are lifted in many parts of the world.
However, after overcoming the epidemic volatility, we have high expectations for the long-term line of the company. With a market value of £ 4.4 billion ($ 6.1 billion), Wizz Air still has significant growth opportunities. With the pandemic over, the company could become a buying target, a development that would create significant value for shareholders. Hence, a 5-7% decline would mean an opportunity to buy shares in this airline company that has created a niche market for itself in Europe.
Finally, investors who are interested in WIZZ shares but do not want to invest all their capital in a single company may consider acquiring an exchange-traded fund (ETF) that includes that share. Some examples:
- Schwab International Small-Cap Equity ETF™ (NYSE :): + 7.7% since the beginning of the year;
- SPDR Portfolio Europe (NYSE :): + 5.1% since the beginning of the year;
- US Global Jets ETF (NYSE :): + 28.4% since the beginning of the year.
Note: If you are interested in the financial products mentioned above but cannot find these products in your area, you may want to contact your brokerage firm or financial planner.
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Editor’s Note: Not all assets analyzed may not be available in all regional markets. Please contact an authorized brokerage firm or financial advisor to find similar financial instruments that may suit you. This content is for informational purposes only. Before making any investment decision, you should do your own detailed research.