The best formula for finding potential outperformers is to look for quality companies that have been badly beaten down by events beyond their control. Sabre (SABR) qualifies, big time, asserts Gordon Pape, editor of Internet Wealth Builder.
Sabre is a software for services firm that powers the back end of many travel-related companies. These include airlines, airports, car rental companies, cruise lines, hotels, search engines, and online travel agencies.
Sabre’s software is indispensable to its clients. It’s a huge market, with the industry generating over $8 trillion annually when things are normal — which, of course, they have not been for two years.
Located in Texas, the company has two main business groups. The hospitality group provides technology for over 40,000 hotels and resorts in 160 countries. The platform allows these clients to optimize revenue and improve the guest experience.
All this is invisible to the public but essential to making sure the travel experience runs smoothly. So, when you phone or go online to book a hotel room you are likely using the Sabre central reservation system. Beyond the reservation platform, the company provides software that manages inventory, guest profiles, staffing, and payment systems.
The second area is centered around the airlines and travel agencies. Sabre provides the technology for mobile devices and all other platforms people use in their daily lives. This provides clients with data rich solutions, which are essential to remain relevant in a competitive marketplace like travel. If you use companies like Bookings.com and Expedia, they’re both built on the Sabre platform.
Prior to the pandemic, the company’s stock was trading north of $27 but it got crushed when travel suddenly ground to a stop, trading as low as $8 in March 2020. It then rallied when it appeared the vaccines had the coronavirus in retreat, only to be flattened again with the onset of omicron. As I write, its trading near its 52-week low, at around $8.50.
At some point, hopefully in 2022, the coronavirus will fade away, as happened with the Spanish flu a century ago. Tourism will return, airports will be jammed, cruise ships will be full, and Sabre’s stock will soar once again. I think you’re looking at upside of 100%+ here, but it will take time and patience.