Forget the IAG share price. If there’s one travel stock I’d buy for my ISA, it would be this

first_imgForget the IAG share price. If there’s one travel stock I’d buy for my ISA, it would be this Paul Summers | Thursday, 17th December, 2020 | More on: IAG OTB Simply click below to discover how you can take advantage of this. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Our 6 ‘Best Buys Now’ Shares I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. See all posts by Paul Summers Enter Your Email Addresscenter_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended On The Beach. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The arrival of coronavirus vaccines has sent stocks in the travel and leisure industry flying in recent weeks. Airline International Consolidated Airlines (LSE: IAG) has been one of the standout performers. Indeed, IAG’s share price is now over 60% higher than it was at the beginning of November. Despite this stellar return in such a short space of time, I’m still not tempted to buy. In my view, there’s a far better pick for my ISA within the travel industry.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Profits tumbleAs my Foolish colleague Alan Oscroft remarked on the day they were released, recent results from online travel operator On the Beach (LSE: OTB) were predictably “horrible“.Adjusted profit at the business tumbled to just £600,000 for the year to the end of September, due to lockdowns across Europe. That’s staggeringly small when you consider On the Beach is valued at getting on to £600m.As bad as this sounds, I’m optimistic it will be able to recover from 2020’s woes. I’d certainly be more likely to pay up for its shares over those of IAG. Reasons to be optimisticOn the Beach benefits from being a purely online, asset-light entity. This means it’s none of the fixed costs that physical travel agents must pay, even if no/very little revenue is being generated. This is partly why, prior to the pandemic, it was generating excellent returns on the money invested in the business.Contrast this with IAG. The fact the airline is barely flying at anywhere near capacity right now doesn’t mean all costs have been drastically reduced. Aircraft still need maintaining whether they’re in the air or not.As well as being asset-light, On the Beach’s business model is very flexible. If issues occur in specific destinations, it can quickly move its marketing spend elsewhere. IAG, or any airline for that matter, isn’t quite so adaptable.Also, On the Beach has a far sturdier-looking balance sheet than IAG. Excluding customer pre-payments, it has £51m in net cash at the end of last month. The sale of artwork by British Airways back in November is a great indication of just how bad things are over at IAG. Volatility aheadNaturally, all investments involve risk and On the Beach is no exception. While its aforementioned qualities should provide better protection over others in the space, the ongoing saga that’s Brexit could still cause the share price to be volatile in the near term.As things stand, we still have no idea whether a Brexit trade deal will be agreed before the end of the transition period on 31 December. Even so, I don’t think a ’90-day rule’ on travellers visiting the continent from the UK is likely to bother OTB’s customer base for long. Nor will queueing in a different lane at border control or getting a passport for their pet. They just want to go on holiday for a week or two!Is On the Beach the best UK share to buy now? No. Does it have the qualities to survive and thrive after the coronavirus storm has passed? Very probably.Some may be drawn to the IAG share price as a momentum play. Then again, I know which business I’d rather own within my ISA. On the Beach goes on my watchlist. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!last_img read more