Why This Expert Is Calling Time on Virgin Australia Shares
Virgin Australia Holdings Ltd (ASX: VGN) shares have hit headwinds since the company’s initial public offering (IPO) in June. With concerns mounting over the airline’s financials and prospects, a leading expert is cautioning investors to sell their shares.
A recent article by The Motley Fool highlighted the concerns of Catapult Wealth’s Dylan Evans, who has a sell recommendation on Virgin Australia shares.
Why Is Virgin Australia’s Outlook So Bleak?
According to Evans, Virgin Australia’s return to the ASX is well-timed, given the recent decline in fuel prices. However, the airline’s capital-intensive nature and vulnerability to external shocks, such as COVID-19, make it a high-risk investment.
Evans cites the airline’s reliance on low-margin industries and its history of failures as further reasons to steer clear of the stock.
What Does This Mean for Investors?
If you’re an investor holding Virgin Australia shares, it’s essential to consider the expert’s warnings and reassess your position. With the airline’s stock price already showing signs of weakness, it may be time to cut your losses and diversify your portfolio.
On the other hand, if you’re considering investing in Virgin Australia, it’s crucial to carefully weigh the risks and rewards before making a decision.
Will Virgin Australia’s Share Price Continue to Decline?
The answer to this question depends on various factors, including the airline’s financial performance, industry trends, and global events. However, with the expert’s sell recommendation and the airline’s troubled history, it’s likely that Virgin Australia’s share price will continue to decline in the short term.
Conclusion
In conclusion, Virgin Australia’s outlook is bleak, and investors would be wise to reconsider their position in the stock. With the airline’s capital-intensive nature and vulnerability to external shocks, it’s a high-risk investment that may not yield the returns you’re looking for.
As always, it’s essential to do your own research and consult with a financial advisor before making any investment decisions.
Disclosure: The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
