Originally Posted by
modandm
Good post.
Agree that PE's have been on the up, but calling airlines growth stocks is a big stretch. Just because some investors are being stupid and overvaluing some airlines (in my opinion), doesn't mean we should with AIR. There is a saying in the investment industry - 'this time its different'. Again and again time proves that its not different.
I maintain that as we move into FY15 and FY16 using an 8x PE multiple is appropriate for AIR, and consistent with the somewhat low valuation NZ investors have traditionally applied to the stock. After years invested, and numerous discussions with management, I have to conclude that some of this discount is warranted, because like it or not its still government owned, and management is not acting 100% to maximize shareholder returns.
Don't worry too much folks - there's still 40% upside on my valuations.. :)
-mod