WEB - Web Travel Group

[whooyeah]

I have been watching webjet for a while; working in an online environment i noticed them for their business model. Which of late has been quite fruitful.

I further research i found out that WEB has no debt with all its cash in the bank. This coupled with the low running overheads of the online environment ensure they have room to grow and reinvest all profits.

Over the past 5 years the average investor return has been 40.2%
The intrinsic share value is $0.55, last year it outperformed all of its targets.

I bought today at 0.37.

Definitely will buy more when i get some more cash.

 

[Richard Willoughby]

Re: Is WEB undervalued?

i think they are, announcement today says revenue grew 200% last year they continue to put the runs on the board, report due any day now should be excellent.
regards tricky

 

[nizar]

Re: Is WEB undervalued?

yeh i been watching this stock for a while now, but not holding... but i agree that it does seem undervalued, especially seeing its potential..

i think it will do well esp as qan cut flight centre commissions and also in one of their reports they said they will start a marketing campaign soon which is good as i dont think many ppl know of this service...

 

[whooyeah]

Re: Is WEB undervalued?

yeah i saw an add on late night tv the other day.

hopefuly they will use some of that cash on a branding campaign, though they seem to be quite conservative with spending.

I also heard that due to past losses they wont have a tax bill for a while.

 

[Stan 101]

Re: Is WEB undervalued?

Web is certainly an interesting one. I've bought in and sold several times between 32c and 40c. Advertising is required as there are very few mainstream people getting the message from my megre experience.
It is a great model, with a slick front end for the layfolk to use easily.
I nice advertising budget with a slick campaign would work twofold. People would use the company and savvy mum and dad investors may buy the stock...

let's see in 6 months

 

[TjamesX]

Still been watching this one, although I don't have any.....

A lot of movement. S8 has got rid of holding it aquired through HWT. Thorney group has increased holdings again.

If you want my tip ---- things are not all good for webjet

1) Airlines are no longer providing commissions (OK we knew that - but I think this will hurt a lot more than they are letting on)
2) Webjet is having to spend on advertising to keep growing - and its selling itself as a place to book flights, not as an integrated travel agency.

Before they stopped disclosing their monthly bookings, webjet sales through bookings were on a steep upward trajectory. Below are a couple of reasons I think this trajectory will severly plateau or even reverse as a result of personal experience with their site;

1) Webjet is no longer the cheapest way to book domestic flights!!!!! On a return trip to Melbourne (from Adelaide) webjet quoted $226 (with a webjet commission of $17) flying with virginblue. The same flight numbers booked direct on virginblue's site was $205...... so webjet states they don't need the airlines commission but are now slapping on their own - I'm sure just as quickly as people flocked to the site, people will now leave.

2) funny buggers are being played with the airline comparison costs. Qantas often show up as cheaper when comparing the flights - but by the time you got to the checkout quote, the flights are more expensive than virgin...... ??? I am unsure if this is Qantas playing with the system (by adding taxes onto the flight costs) or this is done with webjets knowledge......

The reason anyone would book with webjet now????????

I would get ready for some rude shocks over the next year unless they change their business model

My thoughts
TJ

 

[britishcarfreak]

I have to agree with this last statement.

I am a director of a web development firm and have plenty of knowledge on building web based businesses.

Advertising is going to cost them in one way or another. If they don't do it properly the cost will be lack of market recognition and increasingly weaker sales.

If they do it properly it's going to cost them at the agencies and in the placements themselves i.e. advertising nation wide to a broad target audience won't be cheap.

Couple this fundamental market awareness issue with the fact that they're losing their basic point of difference in the marketplace (cost advantage) and this means they're on the way out.

I met an exec from Virgin Blue recently and asked him about webjet and he said.... " that sort of activity doesn't really bother me... we'll get the sales anyway" I interpreted this as they would neither support people like webjet nor would their demise affect them in anyway. When I questioned the exec about building up some greater loyalty to Virgin Blue (as an example of testing webjets sales profile) he was just about to role out their corporate plans and so on. In fact Brett Godfrey (CEO of Virgin Blue) spoke later than day at a seminar and detailed his plans to secure more flights - cost conscious business people and so on - through some membership plans. In my opinion these sorts of targetted airline membership deals won't do any good for people like webjet as some loyalty will come in. This in my opinion means that regular travellers will stick with safe easy same 'ol same 'ol and WEBJET and others like them will just get the cost savers on the occasional family trip.

WEBjets model of trying to offer all bookings in one place is interesting but I don't know too many people that really want all that done for them (car - accomm - flight etc).

Anyway,... sorry for rambling a bit... but I don't see Webjet as a strong business model. It may well be cost effective as most web-businesses are, but given that they're losing cost advantages (i.e. market difference - and or profit margin per activity) and they're also going to have to increase spending to maintain customer base - I don't think they'll grow too much. Surely other established channels for travel stuff (that already have big ad. budgets) will be able to build a better competing product to webjet in time. The hard truth with web based businesses - or any other form of technology based business is that it's hard to build in some monopolistic factor (compelling and non-repeatable edge) as so many people can get their team together and copy your functionality in a short time.

The better backed, better marketed products will win.

The question of whether it's good value at present is not something I'm smart enough to answer. I've done a few trades up and down the 30-40c ramps and will probably do another. I'd be reluctant to jump in in the high 30's and expect much more upside.

Given that it seems on a slide back to mid 30's and theirs bound to be some shake up and unsettled punters responding to the SE8 sell out I'd guess we'll see this as an opportunity to jump in at low 30's and pull atleast 20odd% in a few weeks.

 

[TjamesX]

WEBjets model of trying to offer all bookings in one place is interesting but I don't know too many people that really want all that done for them (car - accomm - flight etc).

As it sits I think this is their only point of differentiation at the moment. But the bottom line is you can now buy cheaper direct from the airline websites and there are plenty of hotel accom websites around to book cheap accom.... which only leaves the car rental as real convenience....

Basically for the reasonably web savvy, I don't think webjet makes sense for domestic travel and accom anymore. This leaves overseas travel - and I for one can't picture myself booking that over the net without talking to a person about it, couple this with flight centres extensive network for this type of travel and the fact they are under pressure to perform.

Whoever is advising Pratt on his holdings (via Thorney group) in WEB..... well I hope they some other info that paints a better picture....

TJ

 

[britishcarfreak]

Also... how long will their tax effective position last? Having a number of losses means some fantastic profit potential in the short term but this only lasts so long (the line of credit so to speak with the ATO will dry up).

I haven't watched the WEB announcements too closely - but I did read the annual report. Where's the budget for marketing???

Another thing that struck me as odd was the costs for web development work was litteraly peanuts. I think it was like $30k or something. Now if they had good dev staff internally I'd understand that outsourcing might form say 10% of their expenditure on system builds (new features, support, extensions etc.) - but from what I remember it detailed that an external web agency did all the build work on the actual product. This is sus.

 

[Richard Willoughby]

great 6 monthly report, net profit up nearly 1400%. record jan 06 trans +all time record for 1 week in feb 06. what do they have to do to inprove sp? they continue to excel..
cu tricky

 

[burmans]

As it sits I think this is their only point of differentiation at the moment. But the bottom line is you can now buy cheaper direct from the airline websites and there are plenty of hotel accom websites around to book cheap accom.... which only leaves the car rental as real convenience....

Basically for the reasonably web savvy, I don't think webjet makes sense for domestic travel and accom anymore. TJ

The trouble with this statement is it fits into the assume everyone is like you theory. I've been assisting a few people with their flight/accomodation/car rental queries over the web recently and while it's certainly true that by researching accross a number of websites you can get a better deal, I'm finding many people are crying out for a central place to do this and are quite willing to pay out the $15 or so for one central site.

There are many many people for whom time is money and there is no doubt that searching multiple web sites does take time.

This leaves overseas travel - and I for one can't picture myself booking that over the net without talking to a person about it, couple this with flight centres extensive network for this type of travel and the fact they are under pressure to perform.

Whoever is advising Pratt on his holdings (via Thorney group) in WEB..... well I hope they some other info that paints a better picture....

TJ

 

[burmans]

Still been watching this one, although I don't have any.....

A lot of movement. S8 has got rid of holding it aquired through HWT. Thorney group has increased holdings again.

If you want my tip ---- things are not all good for webjet

1) Airlines are no longer providing commissions (OK we knew that - but I think this will hurt a lot more than they are letting on)
2) Webjet is having to spend on advertising to keep growing - and its selling itself as a place to book flights, not as an integrated travel agency.

Before they stopped disclosing their monthly bookings, webjet sales through bookings were on a steep upward trajectory. Below are a couple of reasons I think this trajectory will severly plateau or even reverse as a result of personal experience with their site;

1) Webjet is no longer the cheapest way to book domestic flights!!!!! On a return trip to Melbourne (from Adelaide) webjet quoted $226 (with a webjet commission of $17) flying with virginblue. The same flight numbers booked direct on virginblue's site was $205...... so webjet states they don't need the airlines commission but are now slapping on their own - I'm sure just as quickly as people flocked to the site, people will now leave.

2) funny buggers are being played with the airline comparison costs. Qantas often show up as cheaper when comparing the flights - but by the time you got to the checkout quote, the flights are more expensive than virgin...... ??? I am unsure if this is Qantas playing with the system (by adding taxes onto the flight costs) or this is done with webjets knowledge......

The reason anyone would book with webjet now????????

I would get ready for some rude shocks over the next year unless they change their business model

My thoughts
TJ

Don't you hate having your predictions in print, the ongoing market announcements from WEB suggest both their bookings and revenue are continuing to increase markedly. So someonone is booking with these guys.

 

[lewstherin]

I use Webjet all the time. I just don't book anything through them.
Simply look up the cheapest fare provider, then go direct to that airline/hotel/car company's site and book directly there. This way I avoid the Webjet fees, and in fact I've gotten better bundle deals (car+flight) off Virgin Blue than advertised on Webjet.

 

[3 veiws of a secret]

Well I just booked flights for 8 people to QLD ....tried Webjet ,then Zuji.....then rang my local travel agent I use often.
Interestingly I agree with your posts re WEB fees!!!!! but nut this one out .Travel agent calls me back if I pay within 48 hours cash ! they will match Zuji.com ,and do a better deal for a peoplemover van also !!!!
So is WEB really sharpening it's pencil or the local travel agent -its got me buggered !
Coincedentally Huntleys has this as a BUY ( I think !!) that' s why I posted on this thread. Alas no charts,or other words of wisdom! :bowser:

 

[burmans]

I use Webjet all the time. I just don't book anything through them.
Simply look up the cheapest fare provider, then go direct to that airline/hotel/car company's site and book directly there. This way I avoid the Webjet fees, and in fact I've gotten better bundle deals (car+flight) off Virgin Blue than advertised on Webjet.

Yes I do this too, but that's missing the point. Just because we experienced web users do this does not mean what this site does not offer a valuable service for some. There are many, many examples I can think of where it's not the cheapest service that wins, it a cheapish service with good facilities. Persoanlly I think their volume numbers indicate they are providing a useful service regardless of whether I will book through them!

Assuming everyone else behaves like you do is in my experience a very poor way of judging companies.

 

[gregcourageous]

WEB - Webjet

Hello, I've heard a little bit of banter around the place regarding webjet being a takeover target, by who i don't know. Has anybody been following that may have some more info?

Cheers.

 

[BIG BWACULL]

Re: WEB - Webjet

Hello, I've heard a little bit of banter around the place regarding webjet being a takeover target, by who i don't know. Has anybody been following that may have some more info?

Cheers.

Nah no news sorry, been holdin for a while and finally yesterday some interest 33.5c open to 36c close on 2 million shares, i smell a PLANITONEARTH announcement is due sniff sniff cause its overdue but who knows whats goin on
At least their makin money and are lookin to start paying dividends to share holders Wahoo .Oh by the way webjet dont own any Uranium tenements LOL

 

[bigdog]

Nah no news sorry, been holdin for a while and finally yesterday some interest 33.5c open to 36c close on 2 million shares, i smell a PLANITONEARTH announcement is due sniff sniff cause its overdue but who knows whats goin on
At least their makin money and are lookin to start paying dividends to share holders Wahoo .Oh by the way webjet dont own any Uranium tenements LOL

I hope that "gregcourageous" suggestions come about.
--I am now watching for unusual after market transactions!

Perhaps David Clark is buying WEB shares!!!

Back in November 2006 David sold shares three days after share issue and the SP dropped from 38 to 36.5 cents yesterday

Nov 21 AXS ANN - WEB issues 2,000,000 @ 0.17493 = $349,860 to Managing
Director (David Clark) pursuant to ‘Resolution 4’ approved at Annual General Meeting held 10th November 2004.

Nov 24 ASX ANN - David Clark sells 1,938,226 (ord. shares) for $731,486

No. of securities held after change 161,774 shares and 4,000,000 options

I hold WEB

 

[GRTRADER]

Anyone know what the deal with webjet is - there shares are now worth around $1.30?

Seems they jumped a huge amount in June?

 

[bigdog]

Anyone know what the deal with webjet is - there shares are now worth around $1.30?

Seems they jumped a huge amount in June?

Share restructure of five shares now converted to one share

So divide the $1.30 by five and old share equivalent is now worth 26 cents and well below the mid thirties prior to the change
-- we have all gone backwards!!!!

WEB will pay an unfranked dividend of 2 cents for new shares