Referring to the telephonic conversation with the boss of a large US cruise line operator at the onset of Covid-19, the CEO of Tui (Anglo-German tours and travels operator) says “Shared pain is halved pain”. Fair enough, when the giants in the sector are bleeding then the entire value chain would bleed equally, if not more. But what if a company which had historically derived its income from a volatile segment of a sector has over the period diversified into growing and niche pockets of the sector? That is, in the downturn the magnitude of the impact is less severe than pure-plays in the sector and yet the company’s shares continues to trade in line with the sector?
Mit freundlichen Grüssen aus Luxembourg
Léon Kirch, CIO & Partner