On a personal level I could prove you wrong about the low rewards bit during my involvement with Air over the last couple of years.
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According to Craigs the average shareholder return over the last 10 years for AIR has been a compounding annual return of 12.5%. Those who have taken the ride on AIR for the long haul have done very nicely indeed. I believe gross dividends including special(s) will be at that level on average over the next few years and capital gains will be on top of that. All aboard before we depart FL275.
In August 2012, AIR NZ's annual report predicted 2013 EPS would double. On that, the share price went from 90c to $1.09 over two days and to my entry point of 1.24 a few days later.
Buyers had to ignore the entrenched herd belief that airlines are a bad investment, and the pain of paying 20% more than the price two days prior.
Some Sharetraders did (see p48). Since then they've had 42 c divs (net of 28% tax).
Take that off the purchase price of say $1.09, add back say 10c interest [$1.09*3% net interest, compounded for three years], and they have more than tripled their investment.
So far.
Lessons for me were:
1) act quickly
2) the herd is sometimes wrong.
Done a quick check and here are my calculations for 10 year annualised returns with dividends to 12-Oct:
2005-2015: 13.0%
2004-2014: 5.4%
2003-2013: -1.6%
2002-2012: -3.5%
2001-2011: 0.5%
we will ignore the
2000-2010: -14.4%
1999-2009: -17.5%
because that was different :mellow:
Best Wishes
Paper Tiger
PS:
Attachment 7665
PT - pretty volatile returns on a year by year basis eh
But a few more years of +50% and all be honky dory and all shareholders will be happy as
No bad years coming up by the looks of it
Oil down again overnight
AIR to get to 280 today methinks
Punters slowly waking up ....just need to see more instos topping up so they can outperform (but hen they generally not real active investors anyway)
I predict a party atmosphere at next years annual meeting. Last time they predicted profit would double in 2012 it nearly tripled, (up 174% 2012 to 2013 on the back of a 100% prediction).
$496m plus 174% = $1,359m before tax...based on their conservative record of predicting profit and the fact that the other day they said they were on track to EXCEED $400m in the first half perhaps my $1,000m forecast for the full year has some upside prospects ?
Hey roger - you forgot to add that after that big increase th following year was +50% and then the following again was huge.
Looks like we alright through to 2018
Happy with $1 Billion at this stage mate (inclusive of positive Virgin contribution). Notice that this analyst says AIR has consistently achieved well above guidance.Quote:
Craigs analyst Chris Byrne said in a research note that given the airline has consistently achieved well above guidance over the past three years when it has given guidance this early, he assumes the airline is anticipating earnings of at least 10 percent above the minimum or at least $440 million for the first half, which would be up 90 percent year on year.
Byrne also expects Virgin Australia to contribute positively to the national carrier’s earnings this year so its profit could be even higher. His revised full-year forecast for earnings before tax is $839 million, up from $738 million.
Yeah, looking positive now 276.5