Interesting post hoop but won't any stock be going up,Down or sideways?
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Interesting post hoop but won't any stock be going up,Down or sideways?
Not worried about the short term mate. Nobody can reliably get a handle on how long the oil price will remain a tailwind. As per post #2240 my assessment of fair intrinsic value for the stock, net of any fuel price tailwind is $3.38.
Add to that whatever gains they might make to earnings from oil under $100 for however long it stays there. I think about 7 cps this year and about 15 cps next year if it stays around the current level.
In a perverse way oil rebounding up to about $70-80 might really help AIR with their positioning in terms of a relatively new fuel efficient fleet.
Not worried about the short term mate. Nobody can reliably get a handle on how long the oil price will remain a tailwind. As per post #2240 my assessment of fair intrinsic value for the stock, net of any fuel price tailwind is $3.38.
Add to that whatever gains they might make to earnings from oil under $100 for however long it stays there. I think about 7 cps this year and about 15 cps next year if it stays around the current level.
In a perverse way oil rebounding up to about $70-80 might really help AIR with their positioning in terms of a relatively new fuel efficient fleet.
Any correction to circa $2.50 will see me buying more :)
Roger - can't these chart pros predict oil price?
The chart pros can confidently predict that the price will go up, down or sideways. The amateurs simply wonder in amazement at how powerful supply manipulation is. IMHO, the charts are little or no help in predicting price in a controlled market, except perhaps timing confirmed entry or exits.
http://research.stlouisfed.org/fred2...s/WCOILBRENTEU
Speaking of price charts, I hadn't actually stepped back to look at AIR [disc: hold a modest %]. This is a monthly line chart with the 200 day EMA. The rising trend lines are high/low price (which is why they don't touch the closing price line). What a schizophrenic share, it's all over the place! I remember the collapse and govt bailout, but even after that it's just crazy volatile. The last three years have been good for AIR. Assuming the good times continue, I'm accumulating any weakness, however a breakdown through the 200MA would be sayonara baby.
Attachment 7054
Hi Baa Baa
No, No, No, not a schizophrenic all over the place stock ..your chart shows AIR as great example of a cyclical stock :)...
note the 2001/03 recession, 2006/07 boom, 2008/09 recession, 2011/12 global hiccup, 2014 boom
Now for the hard part; you just need to predict when that time will be!
Based on the current market situation and on the financial analysis presented in this forum, FY 16 will be another bumper year for AirNZ and (as Modandm stated) while growth most probably slows subsequent to that, the company will generate large free cash flows. These are likely to be distributed these as dividends which should push the SP up further as investors late to the party clamor for the dividends.
Baring a massive sudden increase in Brent, a world-wide geopolitical event, recession or a calamity, at this point I can't see the SP declining significantly within the next few years.
We just need to keep a firm eye on the key variables.
Best of luck Zaphod with your methodology..I think you'll need it
Cyclical stocks are notorious beasts..they can make you a fortune but they are also portfolio destroyers..One should never use long term buy and hold investment strategies with Cyclical Stocks..the risk is too great
During economic down periods the financial section of the newpapers are littered with examples of shareholder destruction and Government bailouts...OK..they may seem great in a bull market but the risk is often too great and most people would know at least one person in the investment world who chooses to keep well away from cyclical stocks and invest their lifetime hard earned savings within a much safer low growth high dividend more stable environment...People tend to be more optimistic with their forward fundamentals when they surrounded within an upbeat economic environment...so the failure to time the exit can be the killer..
Thinking and analysing using forward fundamentals??...forget it... See chart below and say to yourself would you have got out using the TA cyclic reversal sell trigger when:;..
1..I don't believe in TA longer term future the share price is only in a correction..
2.. I believe in brokers forecasting rather than squiggy lines
3....the Olympic games are coming down under and NZ has formed alliances to take full advantage of that..it's one time boom waiting to happen..
Imagine selling out at $2.00 in April 2000 after a +54% increase in interim profit, the brokers forecasting a +25% profit next year and the Sydney Olympics due to start in 6 months...would you????..TAer might but a med/long term FAer? I don't think so....6 months later the share price is $1.70 and Olympic games begin...do you sell now????
Cyclical stocks are much more sensitive to variables than the non-cyclical stocks and sudden happenings occur which some are destructive...You will find some Investors having a portfolio management strategy..by investing in the exciting up trends of cyclicals during economic recoveries then shifting to the boring more slow rising non-cyclicals as a type of portfolio defense when (s)he feels the economic boom is at or past its peak...
http://i458.photobucket.com/albums/q...0forecasts.png