Wow...and some people think the AIR SP is overheated...
Printable View
Wow...and some people think the AIR SP is overheated...
QAN a pretty good company these days ......and fortunate enough to have as its home exchange plenty of instos / punters happy to invest in their airline.
QAN will always have higher multiples than AIR
Had to look up "multiple". Amazing that I've been doing ok without knowing what that meant ;)
Interesting experience yesterday. Flying from Wellington to Brisbane on Virgin (code share). Towards an hour out, I was gazing out the window and saw an Air NZ plane shooting through in the other direction. It looked like a missile due to the combined speed I guess, but I was surprised as to how close it was. My guess was about 500 metres away and just slightly below but it could have been further. Close enough to know it was Air NZ though. Is this normal? I've never seen anything like it and have flown hundreds of times.
Sounds like a near miss report due for that Alf. Or was it Beagle with a chartered plane :). Yes good post Beagle thanks. Im not buying but holding.
I have been in a private jet between Fiji and New Zealand and the pilots told us to look to the side about 5 minutes out and again when closer and same thing, we saw an Air NZ flight coming the other way, not a lot of difference in altitude to be honest but similar distance to you, nothing alarming about it from the pilots we had and like you, was a pretty quick glimpse which I got on camera but only a few frames worth.
https://www.nbr.co.nz/article/carry-...%252520Edition
Just got to wait a while :)
[QUOTE=RTM;672409]About 7 weeks ago I sold 7000 at 2.73. They were getting to be to big a % of my portfolio. Now I know I've got a screw loose.[/QUOTE All profit is profit, whether it be large or small, and in my case the larger the profit, the more I leave behind when I pass on, so from that viewpoint, you can't lose aye.
These are on my regret list. I sold for a large parcel @ $1.98 after buying in at $1.78! I'd just sold some investment property and threw the money into shares with little to no research. Then subsiquently freaked out and sold up after a few of my investments rapidly depleated in value... Lesson learnt. Unfortunetley it was before I discovered this site which is a huge resource! Thanks everyone for their input. Missed on this one but have learnt a bucket load from peoples opinions on the way...
i can relate. i sold 50% of my AIR stock when it hit 2.45 bc the rest of my portfolio had taken some big hits and I was trying to get a bird in the hand, instead of just admiring the ones in the bush (ok that made more sense in my head) but you know i wanted to get some actual profit in the bank, not just on paper. we all know its easy enough to rue selling or not selling but if we had that sort of insight we'd all be millionaires.
damn kicking myself now sold last at around 3 for 100% return now they near 3.40 gee whiz my timing sucks
As i said mid last month still plenty of juice left. I am happily holding over 130k volumes 😎
Not to worry, 5 years ago bought in the 80s & 90c and sold in the 1.35s, then it went to over $3. So we all been there. Funny last year everyone were buying and averaging down. This year lots of buyers are buying in and averaging up. Might get another lot at end of week when dust settles. My av price is now 2.74:).
I still have not got a chance to add more since my last buy @ $2.90 7th June. Dreaming on <$3.20 but with the price further gone up today, it seems impossible...:scared::confused: Although I am a late comer to the game, I am very glad to see a healthy 16.6% gain to-date in my portfolio!
Have a look at http://www.sharetrader.co.nz/showthr...hlight=holding
And feel free to post your own
Check out this story from the NZ Herald Android App
http://nzh.tw/11885474
The sp action has surely defied the expectations of many people on this forum and seem to be marching ahead, 350 and beyond does seem attainable from here until the FY results and outlook out next month.
im tempted to sell to cover some losses on other stocks but i read somewhere that the difference between amateurs & pros is that the pros sell the losers and keep the winners, and amateurs sell the winners and keep the losers (i guess with the hope that maybe one day theyll recover)
so maybe i should just hang on to them
Yes it sure has. Some people think they can pick which part of the economic cycle we are at, I'm not sure anyone really can. There's a strong argument for instance for saying that many European countries are only now beginning to emerge from effects of the GFC and the outlook for growth there is the best its been in years. Still expecting $575m before tax = 37 cps after tax, (risk is to the upside in my opinion) and a reminder that the ten year average PE for AIR is 11.
I have no intention of reducing my position, very happy indeed with the five year dividend yield outlook.
Stock is a no fly zone for me at anything over $3, no matter what price it reaches, will be seeking a safer option for my next XOS divvy. Price is over inflated IMO, due to most of the selling coming from that 4% retail pool selling to larger overseas buyers, many of those holders will be thinking they have won lotto, I'm sure they are enjoying their windfall.
Thanks Couta , every time since $ 2.50 that you have called it overvalued etc etc we have pushed up 15 cents . So looking to take out $ 3.50 in the near future .... even with a 20% retracement from here ( without a S/L) we will still be above your " overvalued , thin air territory "
Keep on calling it ....
I said I wouldn't buy it over $3, not $2.50, the stock has been re rated since my prior valuation, just because the market continues to drive the price up doesn't mean that's what it's worth, sentiment rules short term. For those that bought at a lower price, all good, but for those picking up the can of late, no safety net included with purchase.
Couta don't try and rewrite history .
You could have talked a lot of people out of a good thing with your "opinion"
History shows us you don't have a good call on this .
Fully priced at $ 2.50', I'll look for that one on the Tui billboard next time I drive down the motorway ........
Ha... as good as 3.40... still making money even when I'm wrong, 2017 is a special year!
Yes we've all made them. The thing I find distasteful here is the bringing up of old posts, which are then used against you. Posts are made from the viewpoint of the moment and should be viewed in that light. As I already said in a post above, Air has been re rated since my $2.50 target, but the question is whether it's worth it's current price, not IMO. PS-The Motley dude reckoned it was overpriced at $3.26, when he last wrote an article on Air, too many variables outside of management control compared to other stocks he reckons.
Couta forgive me if you find it distasteful .
That was one post of maybe half a dozen from below $ 2.50 where you have said all the way up it is over valued ......( not just one moment )
Now you say it has been re rated , but at the same time still saying it is over priced .
Would have maybe been good if you said at some stage - have looked at the numbers I now value this at $ 3.00.
To reiterate Tourism booming .
Air NZ running a slick operation .
Other posters have pointed out the efficiency of the fleet and low cost of av gas and a good forward hedging policy .
Lions tour , Americas Cup, the relative safety of NZ , clean green Country to visit all very favorable to AIR.NZ
The added bonus of a good management team ( despite their penchant for regular sell downs - pity some of them gave them away )
Plus a board that will be strengthened by the EX PM in due course .
Lots to Love , so we agree to disagree , you are welcome to your opinion . However as a non shareholder your regular calls of over priced come across as nothing but bashing .
This has been in a solid uptrend from $ 2.20, my motivation is more to help others and telling them this is over valued from $2.50 could have cost someone a great trade .
Take a read of some old AAPL forums , plenty of people calling it overvalued at $ 50.00 as it went to $ 700.00 before the 7:1 split .
Cheers S/L
Many thanks stop loss .Good reminder about the impacts we can have have on other people if they are naive or stupid or follow orders, advice ,opinions, directions, self appointed authority figures etc , and if we are stupid enough to act like qualified licensed advisors or get carried away at times. We can be made accountable for our past posts, absolutely; lets be careful out there and make it clear its just an opinion and nothings a certainty and follow no one. And if we all remember the first investing rule ,Don't Lose Money and the 3rd one, Don't Help Other People Lose Money.:eek2: AIR ,I'm holding not folding atpit. Also holding in this sector on ASX ,PTB and AQZ
As a non holder here is my "OPINION" that matters more than anything else in this world - case can be made to buy AIR, case can be made to sell AIR.
Personally, I invest based on fundamentals more than market sentiment and momentum... the market's opinion is the only one that counts and I have to take a step back and think what made me miss the 50%+ upside that AIR has seen over the last 6 months - for me, I was stingy with a buy order in the 230s and wasn't bright enough to chase it on the way up after it had a good run ( I was thinking that a pullback absolutely must occur )
Most airliners have experienced significant support from the market over the past half year and I was looking elsewhere :(
Chart includes Qantas, China Southern, Southwest and the Crude index: BRNTB Crude Oil (Nymex)
Attachment 8972
Despite Air NZ making less money than they were last year the overall sentiment is clearly bullish moving forward... whether that continues or not i have no idea, but the case can be made for an investment in AIR even at these lofty prices so long as you know when to leave it on the table...
Disc: not held
Euphoria, that hits the nail on the head winner, nothing to do with value aye. I'm just happy I'm not a buyer at current prices, no chance of getting a severe trashing like the Air coaster can dish out, others may like to consider that if they are contemplating taking up a position at such lofty levels. I'll leave the bulls to it now, I'm happy over on planet Spark, not as sensational, but a whole lot safer IMO.
AIR has over 1.4billion cash in its war chest to fend off competition, it's in a much stronger position than this time last year looking forward. Just look what it is doing to Hawaiian, whispers are that they can't stand the heat. The American's couldn't during the shoulder season either.
Thru their war chest they have the ability to dictate the terms in respect of revenue sharing routes. They could easily take a million a week loss for a couple of years on the Tasman, as an example, if needed to squeeze their opposition. This is why Qantas will not take them head on with regard to Jetstar.
A couple of months back I thought AIR was going to go south but got back in shortly after, rereading some of Roger's posts swayed me also.
RTFQ - don't forget that a large chunk of that 'war chest' isn't really their money, it's punters money (prepaid fares) that AIR still need to spend cash on flying them to wherever.
AIR had a billion in the bank on the day the government bailed them out many years ago.
AIR collect $50m or so interest a year on that cash - that's good eh.
Well into the 340s now, not long to cross that 350 mark, after that who knows...did someone call 400 is a real possibility as well.
Extract from post 29 June. I am starting to ponder however given the recent SP strength whether my estimate of $575m might be a bit low. I was well under with my half year estimate back in February...maybe the full year result starts with a 6 ?Quote:
Shareholders have enjoyed a stellar run this quarter so some consolidation around the current level shouldn't be a surprise to anyone while we wait for further clarity on progress from the company which will come from not only their monthly operating stat's but of course the annual result itself in August and management briefings around that followed by potentially a FY18 forecast at the Annual meeting.
Winner, I was lead to believe this was in addition to forward bookings, but you may well be right. Cheers
I think the whole airline industry is worth a lot more theses days then the multiples they have traded on in the past. Oil is looking more likely to stay low, not only because of the glut but also as more countries look start embracing cleaner technology. Planes aren't 'green' in the slightest but it's pretty hard to get around that, the global middle class is growing (with the bulk of this growth coming from Asia) the amount of people flying is growing, cargo is growing. NZ is also in an awesome place to take advantage of theses factors via tourism and a huge population increase now running at around 1.5% P.A! All of this bundled with superb management... What's not to love?
I think the people who believe this company to be overpriced are mislead by the past trading history, looking at the fundamentals, why is it overpriced? I don't see why this company can't trade at $5 as we approach 2020. As MOD and Beagle have pointed out as much as $1.50 worth of potential imputed dividends can be priced in.
I can see an argument for the industry being cyclical and the inherit risk of aviation but I still don't see why this stock should trade at any less than a PE of 10 minus the priced in free cash flow of the early 2020s.
Nice post allfromacell. I got to pontificating a little over the weekend about how the analysts with their fancy DCF models have got this so wrong. As recently as mid June 2017 average 12 month price target of analysts was $2.19
My first point of conjecture centers around the structure of their DCF model. All of them seem to make specific profit and cash flow forecasts for five years followed by a terminal growth rate. Their guesses beyond the company's own guidance for FY17 are just that, guesses based on a specific set of assumptions many of which can be badly wrong.
Issue 1. Five year specific cash flow forecasts current in the market encapsulate the 2017 - 2021 period and therefore specifically exclude two years 2022-2023 when AIR is ostensibly on a capex holiday and generating massive free cash flow, perhaps as much as $1 per share each year.
Issue 2. Most of these models have a terminal growth rate beyond the specific five year forecast and those I've seen use 2%. I think that terminal growth rate assumption is fundamentally flawed.
IATA are expecting growth in international travel to continue for the foreseeable future at ~ 5% per annum as it keeps getting cheaper in real terms with increasing fuel efficiency of high tech aircraft.
If broker DCF models encapsulated the tremendous free cash flow up to 2023 of AIR and used a different terminal growth rate assumption they'd kick out a completely different number. I think their models are flawed. Ten year average PE is 11 and my forecast is 37 cps this year.
Now that AIR are in a sustained and disciplined growth trajectory, (that continues to deliver CASK improvements as they leverage profit growth off their $600m fixed cost base) perhaps a slightly higher PE than the historic is warranted ? I don't think $5 at some stage in the years ahead is completely out of the question, not at all.
Just allow me to add some observations to this thread. Booked over the weekend a trip to Europe / Singapore for later in the year.
1) Prices are as low (or actually lower) than what I used to pay 20 years ago for a trip to Europe ... no matter whether you go with Air New Zealand, Singapore Airlines, Qantas or Emirates (that's the carriers I checked); Must be a buyer's (travellers) market.
2) All of the carriers above (but Air New Zealand) offer now a 30kg luggage allowance in economy. AIR offers just meagre 23 kg;
3) Some of the carriers (well, certainly AIR) charge additional "hidden" fees for paying with credit cards (how else do you want to pay over the internet?). Others (like Singapore Airlines) don't.
4) Ah yes - and for my route was Singapore Airlines anyway offering the best connection (but admittedly a home game for them) AND the lowest price (without considering their better handling of credit cards and their better luggage allowance.
Guess which carrier I booked with?
Not writing this to annoy AIR share holders, but I think there are a couple of things to deduct from my experience:
1) AIR is falling back compared to the other carriers in terms of the quality of their offer AND
2) margins can't be that good (for all of them) if they have to drop their prices to 20 year lows ...
Maybe somebody wants to ask AIR management why they risk falling back behind the competition by annoying customers with hidden fees and meagre luggage allowance? It is very easy to damage a brand ... just imagine what might stick in the memories of travellers: AIR - the greedy Airline?
AIR have a specific Pacific rim focus BP. I would be the first to agree their product offer pricing to Europe is not compelling and I wouldn't hesitate to book Emirates or Singapore airlines if I was travelling to Europe. What they're doing is working very well though and in my opinion FY17 is a watershed year for their business as they have shown the veracity of their business model is extremely robust notwithstanding a substantial amount of new competition.
Nine new super efficient dreamliners sipping fuel quietly with several more arriving in the years ahead...a real bean counters delight those aircraft are and customer satisfaction with them seems very high too from company reports...a classic win-win for shareholders and customers :)
Prices / demand to Europe is very modest at present...with all the terrorism any wonder why !
As the price rises, the dividend yield becomes less and less attractive, excluding specials, for a high risk stock. Like winner says, hype and euphoria rule the day. PS-Perhaps some punters are buying thinking the 13% dividend yield they see is normal, they might need to get their calculator out aye.
I am forecasting 20 cps annual divvies and 75 cps in specials over FY20-FY22 all fully imputed so approx. $1.75 back / 0.72 $2.43 gross over the next five years.
2.43 / 3.44 = 70.63% = average annual dividend yield of 14.13%, therefore based on my assumptions on a five year view the dividend yield is still very compelling.
I do accept however that any attempt to forecast five years ahead in the aviation industry is subject to significant variation either to the downside or upside.
In my opinion however, superb management and governance goes a long way towards mitigating the risks in a notoriously risky industry.
I think that's an interesting point to ponder. Just because AIR has an average PE of 11 over the past decade perhaps given IATA expects travel to grow at ~5% for the foreseeable future this suggests its possible a slightly higher PE might be applicable going forward. a PE of 12 for instance on my estimated FY17 earnings of 37cps suggests as much as $4.44 is potentially possible this year giving potential upside in the short term of as much as another dollar per share.
BP good points you made. 1.. Lower prices all around. 2.. If travellers lost a bit of body weight, then they could up the luggage weight. 3.. Good for shareholders. 4 My answer for 4... Years ago, only the well off could afford to fly. These days every man and his dog wants to fly, even some people on benefits want to fly as cheap as possible, who cares, cram them all into cattle class, they shouldn't be flying anyway:D.
No worries mate. I think another point that's worth making on the domestic travel front with an aging baby boomer population and cheaper domestic fares is people may be more inclined to fly almost anywhere now rather than drive. Anything over about 3 hours car travel and I'd rather fly. Taupo is the absolute limit of how far I can be bothered driving these days.
I would have expected Cullen Airlines "squeeze em in" and bugger the self loading freight's deep vein thrombosis strategy would have caused a drift to the better cabin layout offered by some their competitors.
Doesn't seem to have though.
Boop boop de do
Marilyn
I have been nervous for the last 5 weeks from 2.90 to 3.36 last week. It looks cold but once you have been in for a while it feels good. Just buy a small amount and join the fun. 5 years ago, sold out at 1.35 and had to buy back in at 1.715 up to 3.36, we all been there;).
This has been a truly astonishing run for a large cap stock. I feel like a right fool for selling out in the $2.60s. Uncertainty must be high right here. Most interesting thing will be what happens with competitor capacity over next 12 months. Fuel price outlook heading lower should be supportive of long haul capacity into NZ for both AIR and others, question is do competitors overshoot and start affecting yield outlook again.
Fair enough mate, go with your gut and hope for a pullback to get a better entry point but you can't compare those two stocks / events. AIR still trading on a FY17 PE forecast of under 10, ($3.70 would be 10), XRO still to this day trades on the hope of decent future earnings. One is well supported by fundamental's, the other was well supported by...well...nothing more than speculation at that time, (current prospect of some earnings is looking more reasonable but what's their PE now ?)
$600 million before tax this year is a possibility and that's 38.5 cps after tax and even on a ten year average PE of 11 that's $4.23.
Fair enough mate I hear what you're saying and have definitely heard of herd behavior before but in this case its supported by excellent fundamentals and the trend is definitely shareholders friend at present.
The other thing you can't rule out is one of Marliyn's mates in the sand state airlines like Qatar quietly building a stake after getting so comprehensively rebuffed by American Airlines http://www.cnbc.com/2017/06/22/ameri...-no-sense.html Qatar is a real hole with a truck load of problems, maybe trying to buy some influence around the world with other airlines ? Thing is with AIR, they could buy up to 10% before needing approval from the N.Z. Government to go higher. Of course this is pure speculation but you can't rule it out as a possibility. I for one wouldn't be completely shocked to see a substantial shareholder notice from Qatar at some point in the future. Their route here is probably at marginal profitability...what would they give for a code / revenue share deal with AIR ?
I reckon there's a lot of very wealthy people out there who bought XRO at around $1, and sold over $40, I can't see Air ever giving that sort of return. The herd behaviour makes some wealthy and others very poor.
Don't think XRO has ever paid a divvy , the hounds post on the previous page pointed out a circa 14 % return over the next few years in AIR . Gee I'd take that any day if I could lock it in . Slowly but surely is a good way to go ..
imo better than all in without a S/L in something high risk like XRO
Still sitting on my last 200,000 shares, soon will be double you money for many, already paying enough tax on my realised gains this year. This is a sentiment play, the world has only changed to the extent bank deposits have been flooding into the market... most will be inexperienced investors, for them it will not end well.
Posted 28 March 2017
Its not a phenomenon unique to AIR, in the last quarter we have seen QAN up just on 45% and AIR up 51%. Nobody in their right mind would call QAN a high yield share.
Perhaps investors are now perceiving a better growth / yield environment and a better balance between demand and supply, (constriction on supply through long back order times for new aircraft and increased demand through cheaper pricing and a more stable growth environment)
My view is the market and outlook has changed to the extent that investors are now prepared to ascribe a more normal market PE for airlines rather than the deeply discounted one that prevailed a few months ago. The fact that these two airlines relative share prices have moved pretty much in lockstep as well as other airline prices around the world recovering nicely suggests the goalposts have moved. Many airlines are now trading on PE's that are now normal, (not expensive as many suggest on here) for the airline industry as opposed to being deeply discounted.
This http://www.stuff.co.nz/travel/news/9...-winter-period has gone unnoticed by anyone on here for example. Fact is Jetstar have built a truly awful reputation for cancelling / delaying regional flights and treating their customers with thinly disguised contempt and are reaping the "reward" of what they've sown.
Interesting to see this on Seeking Alpha. I've not seen many (any ? ) NZ stocks featuring there.
https://seekingalpha.com/article/408...ght-think-look
Nice summary.
Cheers
RTM
Qatar Airways CEO Akbar Al Baker has a reputation for speaking his mind. The directors of AA probably couldn't face board meetings with someone telling them how to run an airline.
Overseas investment in Cullen Airlines. Merger and acquisition specialists who are the pimps of the finance world would have run a ruler over Cullen Airlines. If there were immoral earnings in it for them they would have dressed up their report in stockings and heels and told it to go stand on the street corner. That they haven't or kerb crawlers with fat wallets haven't taken the bait suggests the lady is not attractive enough.
If Qatar wants to flash the cash in Aotearoa why doesn't Qatar Gas farm-in on NZ Oil & Gases Canterbury Basin project?
Boop boop de do
Marilyn