About 11 per cent of Flight Centre shares are short and it remains one of the most shorted companies in the market based on a belief held by Hong Kong hedge funds that there was no room for a “bricks and mortar’’ travel agent.

However, Montgomery said the pandemic had made travel more complicated, especially for families with unvaccinated children.

He said the company’s brand and experienced staff mean it was uniquely positioned to not only benefit from a reopening, but gain market share.

“And gaining share means growing faster than the market. When a company grows faster than its market, the possibility of a multiple re-rating is high. And that’s on top of the earnings growth,’’ he said.

Montgomery said since August 20 Flight Centre’s share price had risen almost 66 per cent, from $13.74 to $22.90. 

“It’s been spurred on by investors wanting to profit from the reopening of travel, particularly outbound international travel. And despite being heavily shorted, I believe there are some compelling reasons why the share price has further to run,’’ Montgomery said.

However, he said the reopening of travel did not explain the soaring share price. 

“The magnitude of the gains stem from the lack of opportunities in Australia to invest in this theme.  There are simply very limited opportunities to invest in a reopening of outbound borders. And when investors consider the amount of capital available to invest in the theme, it should come as no surprise the share price for Flight Centre has surged.

“We now believe Flight Centre is at the “significant opportunity” side of the pandemic.’’

However, analysts had downgraded the stock because of delays in the resumption of travel and Qantas’s decision to reduce international commissions from 5 per cent to 1 per cent.

“As travel barriers are removed, we expect analysts are going to revisit their numbers and they’ll see the evidence that pent-up demand is strong, triggering an upward revision to estimates.’’