Here’s why the Flight Centre share price slumped 14% in August

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The Flight Centre Travel Group (ASX:FLT) share price fell 14 per cent in August despite reporting record sales for the year ending June 30, 2018.

A record total transaction value (TTV) of $21.8 billion was achieved, which was 8.5 per cent higher than the previous record amount in FY17.

Flight Centre posted a record underlying profit before tax of $384.7 million, 16.8 per cent  higher than FY17. Earnings per share (EPS) were $2.79 and the full year fully franked dividend per share was $1.67.

Flight Centre shares had a wonderful run in 2018, rising from $44 to as high as $70 during August.

Although not providing specific forward guidance for FY19, Flight Centre did say it expects further profit and TTV growth in the year ahead.

The fall in Flight Centre shares is likely a case of profit taking, given how far FLT shares had run in 2018.

Since the end of August, Flight Centre shares have continued to drift lower in a falling share market, the ASX 200 constituent now trading at $56.49.

Flight Centre shares are not overly cheap, trading on a price to earnings (P/E) ratio of around 20 times earnings. FLT shares trade on a fully franked dividend yield of 2.96 per cent.

The company will provide more specific FY19 guidance at its AGM in October.

Flight Centre shares don’t look cheap, but these 3 shares do…

Combining countless hours of research with over 30 years of hands-on stock market investing experience, The Capital Club’s founder Bruce Jackson has just published his definitive list of 3 Cheap and Good ASX Stocks for 2018.

Flight Centre was not one of them, but the list does include one tiny gold mining stock, and the company one top fund manager calls the cheapest stock in the ASX 100.

Find out why these 3 Cheap and Good Stocks could be better buys than Flight Centre. But you better hurry… these stocks may not stay cheap for long.

See the 3 stocks

Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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Bruce Jackson has 30 years of hands on investing experience. He is passionate about stock market investing, running his own portfolio and SMSF. His focus is on small cap growth stocks. You can contact Bruce at brucej@thecapitalclub.com.au