Sunday, August 27, 2006

JetSet TravelWorld Recommendation

I was reading a review on JETSET TRAVELWORLD LTD (ASX:JET) on www.crazyjimsmith.com and based on the chart pattern thought I would take a quick look to see if it would be a worthy buy.

Looking at the chart you can't deny the stock in a trend traders dream.

Looking at the numbers released it looks like the company is being well run. On this years earnings they are at a PE of 14.5 as opposed to 22 which is shown in comsec. They are also doing a good job with dividends and cashflow.

The major risk I see with this company is the oil crisis pushing up airfairs. This will impact on their bottom line. Also increasing interest rates mean people have less money to spend on holidays.

Another big risk is the new CEO. Its always a bit of gamble to see how they go for a few years before their decisions start to make an impact on the bottom line.

But this is a good stock regardless of those risks. The strong earnings upgrades and cashflow position give this company a good base to launch further profits.

Based on this I think you should aim for a price around PE of 10 to take into account the risks. This would be approx 97c-$1 range. A long way from where it is at the moment ($1.38).

definitely one to keep an eye on as earnings rise.. For those that like to follow the trend it might be a worthy share to follow and jump in soon.

Good Luck.

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