Welcome back from the cooler Roger, Air thread dropped off the first page while you were away. Hey winner last trading day of the month to break $3:cool:
Printable View
Welcome back from the cooler Roger, Air thread dropped off the first page while you were away. Hey winner last trading day of the month to break $3:cool:
Good to see you back on the forum Roger, hopefully we see the magic $3 mark today and more importantly it stays beyond that.
Welcome back from ST Purgatory Roger :D...as you noticed I took advantage of the empty spaces on the AIR thread while you were away :D:D I helped to keep the price below $3 until you got back ;);)
Thanks guys. I think we'll need to be very patient for our entry to the $3+ range. We've got to clear out all the people that believe AIR is a cyclical stock and $3 in the proven top before that happens and that'll take quite some doing. I'm very patient though :)
http://www.nzherald.co.nz/business/n...ectid=11537455
Another feather in their cap :t_up:
Roger..I hate to pop your bubble..... but in reality AIR is a cyclical stock it always has been and it always will be...that's because the airline business is a cyclical industry that is very vulnerable to economic conditions...they are also very reactive to interest rate changes.....Cyclicals are volatile and can turn on a dime...Investing in cyclicals can make you a quick fortune, unfortunately they can also wipe out your portfolio just as quick
As I said so many times on ST (many of my posts and charts on ST have been deleted!!! Hacker???) FA doesn't help you much with cyclical stocks
Ok...AIR is reaching $3 ...it's nearing the top its very steep historic price oscillation wave..it doesn't mean it will stop and reverse at $3 it could go $4 or $5 as it depends on the whereabouts of the stages of the global economic cycle and the effects of each stage e.g mature stage = economic good times = more demand = increased costs to satisfy demand + more competition = decreased market share + lower margins.....so beware and don't fall in love, because the very nature of these cyclical beasts is to exhibit growth during good times and shrink back during bad times taking back all your gains....This behaviour causes a surprising reliable share price oscillation pattern to occur (hence the term cyclical),,, it shows up very clearly on very long term charts...In the past $3 was the oscillation top end for AIR.
.................................................. .................................................. .................................................. .................................................. ..................................................
I posted a historic chart with Company results on the 8th May 2015 but it has been deleted by someone (the whole week on AIR thread is missing)... so I will repost it here to prove my point.
Note how the shareprice falls but the earning are breaking records and the brokers forward earnings are stella...why is the shareprice falling and the PE Ratio is looking ridiculously low???? Mr Market stupid?..no, it is the cyclical behaviour of a cyclic stock ignoring its past stella fundamentals and reacting to recent negative changes of it's outside environment.. My example below shows forward looking (projection analysis) part of the FA discipline can be very unreliable when dealing with cyclical stocks..
http://i458.photobucket.com/albums/q...orecasts_1.png
The example you've posted Hoop conveniently coincides with the Sept 11 2001 attack and the subsequent dramatic drop off in air travel. It was unfortunate that AIR had invested heavily in Ansett just before that and the financial pressure of those two things coincided with the burst of the dotcom bubble and tech wreck of 2001. This one off event happened fourteen years ago. I think you'd make a stronger case if you looked more closely at yields and load factors during the GFC and the effects on the company then rather than picking on the one isolated case when AIR needed support, support that the Govt has been richly rewarded for showing I might add. Even then there's lots of companies that got hammered during the GFC... what is arguably the biggest financial crisis since the great depression of 1929 so the fact that the airline came through that without artificial support for example like the U.S. Govt provided for many of the financials and vehicle manufacturers augers well for the robustness of the current business structure. Yes their SP got a beating during the GFC and so did a heck of a lot of other companies.
The fact is whether people's political leanings and moral compass like it or not, the Government does implicitly stand behind this company and is being richly rewarded for doing so. Unlike the mixed ownership model of the gentailiers who are currently trading on PE's somewhere generally in the low 20's with low growth prospects and specific risk by virtue of the aluminium smelter's potential shut-down, AIR's PE looks especially cheap and its growth prospects especially good and the specific possible risks of higher oil and more competition already appear to be factored in and yet we still have an incredibly low PE.
Yes $3 has been the top in recent years but they've never made anything like $496m before tax before (Fy15) have they and now incredibly we're looking at something like doubling that !! The jury is out on where oil is going, there is no way that can be predicted reliably and what their cost structure in that regard looks like going forward but what I see is an airline that's smashing the ball out of the park in "indifferent" and certainly not booming economic conditions. What if the indifferent, low growth, low oil price, low interest rate conditions continue, (which looks likely at this stage), and they keep smashing the ball out of the park at circa 60 cps earnings for years :cool: My guess, investors will be clambering to climb on board and enjoy regular special dividends.
Air may be cyclical but for the last 10 yrs the cycles have varied between good and fantastic compared to the top 50
Attachment 7697
I love cyclicals - especially when they are 'cyclicing' upwards
But as Hoop says they can quickly turn so watch those charts
As Mr P also said - the market giveth but the market also taketh away (quickly in some cases)
AIR wil keep 'cyckicing' upwards for a while yet