COX & KINGS --- One of the Cheapest Consumer story. Why ???

Friends,

I am looking at Cox & Kings and valuation suggest that this is one of the cheapest consumer growth stock listed. Most of the consumer growth stocks trades at 20+ PE while COX is trading at half the multiple. Debt is an issue but they are paying down debt every year from Free Cash Flow. Still struggling to understand what is missing here that investors are buying COX?

Can someone share some thoughts?

Thanks - Happy Investing.

 

I think travel agency business is out of fashion as people book directly and also commission is paid low by airlines and hotels.

Thomas cook maybe better because it has Quess manpower business and is diversified also from travel agency business.

I saw good research report on Thomas cook if you want i can post it

 

Please do post the Thomas Cook report.

I agree with your statement that travel is becoming an online business. BUT, COX is not just hotel and airline booking company like Make my trip and Yatra. Their major revenue comes from complete package tour which is a huge margin business. If you look at the COXs margin, they are in 30s for past 5 years. Also, in their presentation they have mentioned the domestic tours package business earns ~50% gross margins. I think, this is a good attractive business and hence Thomas Cook bought SOTC few years back.

 

Yes!!! They are in high margin business!!! I am having allocation of 3% of portfolio @Rs.201/-.