Favourable International Travel Statistics May Support Growth Prospects in Travel and Tourism Sector

Investment Summary

Sector Overview and Supporting Catalysts

Data Insights and Analysis

Index Performance

Key Drivers versus Key Constraints

Investment theme and stocks under discussion (AAC, CBO)

After understanding the sector, let us now look at two companies listed on the ASX. The price potential of the companies under discussion has been analysed based on the EV/EBITDA valuation multiple method.

1. ASX: AAC (Australian Agricultural Company Limited)

(Recommendation: Buy, Potential Upside: Low Double-Digit, Mcap: AUD 1.01bn)

AAC is engaged in the production of Wagyu beef and grain-fed beef. It also provides backgrounding, breeding, and feed lotting.

The stock has witnessed a dip of ~7.50% in last 3 month, and over the last 6 months, it has declined by ~7.76%. The stock has a 52-week low and 52-week high of AUD 1.555 and AUD 2.400, respectively and is currently trading below the average of a 52-week high-low average.

2. ASX: CBO (Cobram Estate Olives Limited)

(Recommendation: Speculative Buy, Potential Upside: Low Double-Digit, Mcap: AUD 557.13mn)

CBO is an Australia-based business of production and marketing of premium extra virgin olive oil.

The stock has witnessed a dip of ~9.57% in last 3 month, and over the last 6 months, it has declined by ~19.88%. The stock has a 52-week low and 52-week high of AUD 1.265 and AUD 1.880, respectively and is currently trading below the average of a 52-week high-low average.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 2 March 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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