When I saw the kiwibank play nudged me to believe air will now also provide a special dividend as well.
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Good on ya guys those holding, hope it plays out well for yours sake.
35c special divi. Tell him he's dreamin.
Vin, great day for AIR
Almost certain to go to a new record high (at least since they were bailed out) i reckon
Even cyclicals cycle upwards
Maybe not. Based on current market value of $A0.3675 AIR's stake is valued at $A335.8m converts at .8972 = $374.27m Kiwi = 33.33 cps.
Singapore made an interesting move with a counter party in respect of some arrangement they had with them today and settled at just on 46 cps going off memory so there's potential for as much as $468m or about 42 cps.
On top of that I still have AIR earning 64 cps this year and they have only distributed 10 cps so far.
Further still, there's the possibility a deal would include the new shareholder taking over AIR's shareholder loan to VAH just made, another 13 cps.
I'm not disputing the amount of available cash they may have on hand, it is a very interesting time.
If all goes well I don't see the bean counters giving it all back, it doesn't make business sense to me. A healthy divi.. Yes, 35c I would be surprised. Let's wait and see.
Just a thought...Who's the major shareholder...you think their representative might have a chat with Tony Carter in due course...
Whoever (if it happens) acquires AIR share of Virgin will need to stump up ever more than before when the inevitable recapitalisation/refinancing of Virgin takes place (soon)
Assessing future commitments might put Singapore or Etiad off but then again it raises the possibility of a full takeover by either of them or some other keen watcher
Be interesting if the Singapore and/or Etiad man on the Boad don't get on well with Borghetti as well
Do Singapore and Etiad get along anyway?
http://www.nzherald.co.nz/business/n...ectid=11618562
What's that old cliché...oh yes that's the one, Don't bite the hand that feeds you. I know it seems harsh but it sends an important signal that AIR will not be messed with in terms of former employees making baseless or vexatious claims. AIR seem pretty determined to clear out the non-performing dead wood don't they.
http://www.nzherald.co.nz/business/n...ectid=11618764
Hoop going to cringe at this??
Or smart move by the broker to bait people into buying
no i saw it at 5:00 am (baby wakes up). Content still the same.
I've found a printed version of the article. It says:
The online version is now missing that first sentence of that paragraph, replacing it with just "Investors need to be wary, however." Not a big change to the article but I spent a while googling "value traps" so I was sure I had read it somewhere today.Quote:
He warned however that investors needed to be wary of "value traps". With a price-to-earnings multiple of around 6 times, Williams said Air New Zealand, for example, was one of the cheapest stocks on the market. But he said there was risk of intense competition eroding the airline's earnings base.
Not worried by that bloke. You think increasing competition isn't already factored into the super low PE...for goodness sake, (sarcasm intended) Long term average PE is about 11 and that's based on long term average interest rates. With interest rates headed to 100 year lows a PE of 12 is appropriate across the cycle so at the current price that implies long term average earnings of only 25 cps. Consensus analyst forecast is 55 cps this year and next falling to 42 cps in 2018. He's obviously in Warren Buffet's camp when it comes to airlines and that's fine that's his prerogative.
I'm fully convinced in my own mind that this is not a long term hold kinda stock at current prices, there's just too many factors that can step in at short notice and trash the share price (More than other stocks) Very little margin of safety unless your average buy price is below $2.80 and not a lot of upside with a $3.26 medium target (We won't mention the low target) PS-I learnt a lot of lessons whilst holding a large number of Air shares and left a lot of money on the table.
Nope...no cringe...well done just a great example and timing of how to advertise your fund management business on the cheap..getting those timid customers back into the market and their exixting customers to load more into the funds during the "feel good" rally to new highs is the way to go to generate extra business.
The advertising bait used is usually cyclical type stocks because at the top of the boom cyclicals are raking in the money at obscene levels...To the inexperienced investor and to the Mum's and Dad investors seeing huge profits, high dividend yield and a very low PE Ratio's some as low as 3 who could blame them for assuming Mr Market has got these cyclical stock price value all wrong...
As with most media interview type advertising the business usually adds a typical advert disclaimer.. ".... maybe [Air New Zealand shares] are still cheap enough to invest in ... but we're cautious." ... Great stuff :cool:
Only a wild guess from me..... maybe the media asked why AIR is so "cheap"... maybe he mentioned that Cyclicals are not necessarily a buy when PE Ratio get to very low levels..and then got asked to explain why ..The media then may have over-assumed Stuart Williams meaning, dramatised it and blew it out of proportion, then got asked to tone down the article......who knows..
What ever happened doesn't matter.... what matters now is that investors should is very careful with Cyclicals as they are volatile beasts especially when they are well away from their cyclic wave bottom point.
History shows to an layman investor what seems to be a paradox mirage....... that in realty, often the best time to buy cyclicals is when the PE Ratio is extremely high and the most dangerous time to buy into a cyclical stock is when the PE Ratio is extremely low, much lower than the overall market...
Disc: have no AIR
Good $3 holding up strongly today
Precursor to next week being a boomer
No longer holding AIR, got out at $3.020. Sticking to game plan, will watch from sidelines for a while.
Kinda weird having held them for last 2 years, was my first purchase!
Just for fun ,im going to take the contrarian view and say surly it will not hold the above $3 for long--(all it takes is one busy little Herald reporter to spoil the party)----this is absolutely not investment advice--just the Gut o meter.
PS-having said that--good luck to all holders--no sarcasm intended
Big volume today, (about double the norm), augers well for what you've suggested skid.
One way to get upgraded to first class
http://www.techinsider.io/passenger-...airline-2016-4
Opinion piece. Interesting theory/read.
http://www.theage.com.au/business/av...08-go1xto.html
Thanks sharp. Interesting to hear Mark Lister head of research at Criags talking on the NBR morning report saying most brokers DCF models have very little value ascribed to AIR's stake in VAH so a result anywhere near the current market price would provide a good boost. Speculation of this last week was what was behind the near 7% gain in SP.
Maybe $3 not so over-cooked after all, if they get a fair price. Disc Holding.
You missed my dark humor--(you have to be the passenger sitting next to him...''here Ill just take that, he'll wake up soon''
(hope I hav'nt exceeded any boundaries here,but lets face it -it comes to us all sooner or later..somebody might as well get a free meal out of it)
Looks like a complete takeover can't be ruled out after all. Overseas division is losing $30m a year anyway...just jettison it and take on Qantas locally.
Rebrand it Singapore domestic and with their great reputation the kangaroo airline would have plenty to worry about.
They will have lost that ''connection'' in OZ you were referring to earlier--although Singapore air would still keep it in the Star alliance so that would be best case scenario.
Meanwhile......does that count?????....Nah ,one morning under $3 doesnt qualify,but just goes to show (refer earlier post):)
Having a local *A domestic carrier in Australia would provide some further advantages for passenger, but the existing code-sharing agreement works well and provides most of the major benefits anyway IMO.
Jeez - these 'awards' from The Telegraph
Everybody wants to come to their favourite country New Zealand and AIRplanes are the 3rd best long haul in the world. What a combo
http://www.telegraph.co.uk/travel/ne...15-16-winners/
Headline in today's AFR:
"Air NZ denies imminent sale of Virgin stake"
Article is behind the paywall, of course.
Probably a re-hash of this from the Sydney Morning Herald;
http://www.smh.com.au/business/aviat...13-go504p.html
Boop boop de do
Marilyn
Tangential to doing checks on obscure airlines that actually fly to where I wish to go come June was the interesting discovery that customers rate
AirAsiaX
higher than
Air New Zealand
Best Wishes
Paper Tiger
On that particular survey Garuda Indonesian, Qantas, and Virgin Australia were ahead of Air NZ...... go figure.
Interested to know where margins will be heading for AIR. Decided to take my daughter on a surprise trip to the US during her last school holidays, she has been working hard & she wants to checkout east coast schools. Noted Qantas is currently running a special economy fare which is around half the normal fare while crossing over part of the school holidays..so have a look at AIR site and see price matched on the same days. So paying $1100 economy return each to go in the school holidays while their regular airfares in the recent past have been commanding in the range 2100-2500$ return previously at this time. Don't see it having much effect on this financial year however next years?? The cash cow of AUC - LAX may well be gone.
Id find it a bit hard to believe that AA would be better than AIR but I have flown with both MAL and AIR and despite all the bad things last year ,MAL was definitely better. (Thai was no contest)
to be fair the stewardesses were good on AIR ,it was more other areas of comfort--ie-- being cramped and for some reason we have found AIR way to cold (off the scale) Im wondering if it was just the plane itself which couldnt regulate the temp to keep everyone the same -(some may have been perfect in other areas)..but having said that ,a long haul flight is hard enough with out freezing,and possibly getting sick.
the wife will be returning from Vancouver the end of April--She froze on the way over,but we'll see how it goes on the way back to see if it was just a glitch.
we'll both be on MAL in late June so can compare--flew last year and it was good.
the daughter is flying to Bali with Jet star in Nov.(I imagine it will be a hard slog,but it was cheap and shes pretty tough)
There is a dangerous trend in Wellington Airport's investor day presso for Air NZ (slides 8 and 9).
Over the last 5 years, there has been a growing trend in favour of long haul via Australia rather than via Auckland which is Air NZ's hub. In the last two years I guess almost inevitably this has lead to an increase in Qantas's group share of international flights out of Wellington to almost match Air NZ/Virgin's share.
When I lived in Wellington 6+ years ago, the appeal of flying international all the way, the wider options and cheaper prices did make hubbing via Australia more appealing than Auckland.
Exactly. Low cost airline customers are normally not very experienced or discerning travelers and just happy to be flying.
The quality difference between Air Asia/Scoot/Cebu Pacific/Jetstar and say Air NZ/Sing Air/Qantas long haul is huge and you pay hundreds of dollars for it. I have flown all of them in the last year or so.
Horses for courses but I would much rather invest in an airline like Air NZ without a budget arm. You can always discount your seats to fill the plane but the budget carriers are stuck. Qantas's strategy of having a separate budget arm adds layers of costs throughout the company and has more to do with high unionised labour costs.
Senior exec's keep exercising options and cashing in and selling the shares. Very tough for the SP to track north when they keep over-supplying the market with shares.
Interesting story on Alan Joyce - King of the Quantas comeback. Bit of competition for CL. http://nzh.tw/11622517
Feeling less grumpy this morning after reading that Joyce is on $12m. One supposes that we need to pay market rates to attract and keep the best talent including share incentive schemes but in my opinion there are too many LTI scheme options out there, about 45m as at 30 June 2015, which represents a whopping 8% of the free float of AIR's shares, excl Govt stake.
What do you really have to do to earn $12m?
Perverse!
The $3 holding at weeks end
Looks good for next week
Airlines are proving once again that they are in a commodities business - same product, same input costs, same planes and little differentiation.
The cheap fuel of late has lead to increased capacity, probably beyond demand.
Put all this together the intense competition results in tumbling airfares. Herald reports us$100 odd AA special LA / AKL and stuff says Singapore adding more flights to CHCH.
I reckon boom profits this year for the likes of AIR (maybe a bit lower than forecast) but then heading back to where airlines usually are - not that profitable
AIR at $3 today - maybe as high as it will go
Hoop possibly is right in saying airlines are notoriously cyclical - mostly of their own making
Is now the top of this current cycle?
AIR are getting their fair share of inbound and outbound growth and enjoying the domestic growth that flows from same.
Definitely not a long term hold for me again at current prices, upside potential with increasing competition is quite limited IMO, price currently in no man's land so no good for traders either, really just a divvy play I guess until something sends the SP downwards again, which of course could happen at any time.:cool:
Crikey some Aussie is pointing the bones at airline shares as an investment especially Queer and Nasty Airlines.
http://www.smh.com.au/money/investin...08-go1fug.html
Boop boop de do
Marilyn
I think (in terms of cyclical s) that airlines and tourism (especially here, have hit a ''sweet spot'' and I think the realistic money would be hoping it lasts,rather than expecting it to rocket)
Those holding would want to ride it out for as long as it lasts --but buying in is far more of a risk IMO---to gain alot from this point is asking alot and I get the feeling that covering ground on the profit side is getting on the longer odds side of things when compared with possible downside--Its been a long term gain (7 years) for almost all markets and NZX seems to be riding the peak----Even healthy markets need a reality check once in a while.--The exception would be if more foreign buyers are lining up for a piece of NZ action,but in saying that,that foreign money can go at the blink of an eye ,to safer havens if need be.
That VAH possible sale is one wild card that could help though Roger--good point...It will be interesting to see if it becomes a tussle between Singapore and China..or nothing.
March operating stats out this week
Will still be showing huge growth in pkms (or whatever) and surprisingly high yields
Just back from HK - premium economy and business were both chokka both ways, and economy pretty full.
Fully reflected in the current PE of only 5 IMHO. Maybe the article is misdirected ? Take Auckland International Airport for example, still subject to the cyclical nature of the tourism industry but trading on a PE of 30, six times the PE ratio of AIR....Hmmm.
You have to bear in mind though that AIA is as much a property company as anything else, given all the development they do on their land surrounding the airport.
http://www.nzherald.co.nz/business/n...ectid=11624377
Interesting...
Sydney Morning Herald's article
http://www.smh.com.au/business/aviat...15-go7aqu.html
The more that I hear about this Virgin sale process, the more I wonder if it was just a decision made in haste by AIR because Luxon could no longer work with Borghetti.
This announcement to "explore options" was made three weeks ago. To me it seems that there are surely a pretty short list of options for AIR: sell quickly or sell slowly. I think I would've expected to hear some progress by now. Something doesn't quite smell right about this to me.
I also wonder about the articles from today about Luxon failing to roll Borghetti. Is this a controlled leak from VAH or AIR? Doesn't feel like it would be because it doesn't seem to benefit either side. If not a controlled leak, where did it come from?
One of the worst kept secrets in aviation down under is that Air has been unhappy with VAH's turnaround progress for quite some time now. There's bound to have already been a lot of friction at board level and specifically between Mr Borghetti and Mr Luxon. Sure things could have blown up at the board meeting and C.L. could have resigned on the spot after failing to get the support of other shareholders, (in fact I'd put money on that) but its been coming for a long time. I think its clear the AIR board see Mr Borghetti as a 60 year old "cruiser" and is simply not doing the business in terms of generating an acceptable return on capital. If the other shareholders won't back AIR for a change then they're doing the right thing putting their shareholding under review. These things always take longer then you think, regulatory approval, pre-emptive rights, code share arrangements and so on. If they managed to execute a clean deal before balance date (30 June 2016) at or about current market price I'd see that as a good result. A nice clean unimpeded flight path is a beautiful thing. Happy to hold and happy with the direction the board are headed with this.
Roger said 'I think its clear the AIR board see Mr Borghetti as a 60 year old "cruiser"'
Cmon mate - no room for ageism on this site
Maybe about time Air NZ had a female CEO to keep these guys playing games big boys with egos (halos) play
I'm a 54 year old cruiser :D
Not so good across the Tasman
Business Spectator -
Worries about the upcoming federal election and dwindling consumer confidence have pushed Qantas to slash its expectations for capacity growth as the end of the financial year arrives.
The airline on Monday said its domestic capacity growth over the last three months of the 2016 financial year will now be negative compared to the same time last year.
JUST AS WELL NZ DOMESTIC ECONOMY BOOMING
Jeez QAN down 10% already today
Hope Chris ne'er mutters those fatal words 'things are slowing'
Still falling in Australia down 13% to 3.53
QAN still planning on overall growth next year and this is just tweaking of Q4's scheduling. Market over-reacting. AIR's March operating stat's should be out in the next few days and will give some more insight as to how they're tracking. QAN removing some domestic capacity could be good for VAH.
I am thinking about grabbing a few thinking there could be a rebound fairly promptly but in two minds, with OPEC not going well over the weekend what if any will the impact be on the US and could it carry onto NZ including AIR
Well I just bailed with a bruise or two but without losing my shirt. Was waiting to see if it could get back to 2.95 by close but now I highly doubt it. Will be interesting to see how it goes over the next day, either way I'm ok with it.
Maybe you bought mine... Anyway, good luck :)
I'm afraid not laying my hands on this one for now, the way I see it has bit more room to fall I think...
:sleep: Doing my best to sleep my way through this latest bout of turbulence :sleep:
We might know a bit more in a day or two when AIR releases their monthly stats.