US investment firm discloses stake in Thomas Cook

A US investment firm has disclosed a 5.2% stake in Thomas Cook.

Capital Group Companies has a holding of 80.5 million shares of the 1.5 billion in circulation.

The holding by the Los Angeles-based company makes it the fourth largest shareholder of the FTSE 250 tour operator after Invesco Asset Management, Fosun International co-founder Guo Guangchang and Standard Life Investments, The Times reported.

Shares in Thomas Cook have fallen by more than 36% this year, reaching a near two-year low of 75p last week.

The British summer heatwave that boosted demand for holidays closer to home forced Thomas Cook to warn in August that its full-year profits will be at the lower end of expectations.

However, the Capital Group disclosure sent a positive signal to investors following a summer sell-off of shares after weaker holiday sales, fears of a fall in the value of its Turkish packages and the death of two holidaymakers during a holiday in Egypt.

Credit Suisse analysts cut their Thomas Cook shares target price to 140p from 158p, citing the threat of competition from low-cost carriers moving into the long-haul holiday market.

However, they maintained an “outperform” rating, noting the potential for upside based on the possibility of a restructuring of its airline business that could unlock value.

The stock closed up 2p at just over 78p on Friday.

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