Why do I always get headphones which only have sound on one side
As you all should be aware I think that anyone buying airline shares is several sandwiches short of a picnic but I must say I find this recent descent more horrifying than yesterdays approach to Kuala Lumpur International through a thunderstorm (never seen an air-hostess look so terrified).
One wonders whether the combination of a decline of the NZD against the USD, higher oil prices and that Emirates have changed from handing out those nice hot real hand towels before take-off to a cold moist disposable tissue (started May 1st apparently) is adding to the woes of AIR's own particular situation.
But on a more upbeat note the strawberry and pomegranate smoothies (topped with whipped cream for an extra 4 dirhams) from Pinkberry in Terminal B at Dubai International are as good as ever.
Best Wishes
Paper Tiger
We do not live in a perpetual GFC that will never end.
Quote:
Originally Posted by
forest
Noodles, according to the ASB site the last 9 years had EBITDA margin at 14% avarage. Including the last 9 years were some years that AIR had minimal competition on some routes. Therefor I would not go above the 14% myself but no doubt some will strongly disagree.
Noodles took the current year's forecast and incorporated the next two based on consensus broker forecasts so he made some attempt to measure an across the cycle average arriving at 16.1% EDITDA margin whereas your approach is purely backward looking and incorporates all of the years of the GFC since 2007 By doing that, in my opinion you are effectively assuming the effects of the GFC are going to repeat themselves over and over again in the future. When people are experiencing financial duress during what is undoubtedly the worst financial crisis since the great depression of 1929 they don't spend up on expensive travel and naturally that has had a significant effect on AIR for many years during the depth's of the great recession. To suggest the effects of the GFC are going to be felt perpetually going forward and no attempt should be made to capture the peak of the cycle's earnings in FY16, 17 or 18 is...shall I just say "its an interesting viewpoint" and leave it at that.
Still trying to lose my Amateur Status
So here is the latest Tiger Take on the medium term future of AIR. Calculated value is based on a cash flow model.
NPAT for 2016 - 2020 is derived from EBITDA figures from the brokers, AIR Announcements & Investor Presentations and the holes are filled with Educated Guessing.
Post 2020 everything is normalised long-term assumptions including that gearing is 50%, that AIR maintains fleet size, the average average fleet age is 9 years and normalised capex exceeds normalised depreciation by 20% - that digs into the available cash to give away a bit.
Another assumption is that from 2016 a total ordinary dividend of $0.20 raising at 3% pa thereafter is paid.
I have ignored VAH completely: if it is sold it is a one off; if it is kept then it may be a benefit, or not.
As you can see, I am slightly currently above current broker consensus of $2.82, but my value actually drops over the next two years and then ends up at $2.92 in June 2020.
http://i7.photobucket.com/albums/y26...-Val-Sum_1.png
Obviously a lot of people are not going to like the above but that is how I see it at the moment.
Do Do Your Own Research.
Best Wishes
Paper Tiger
If you are going to do it, do it properly
Quote:
Originally Posted by
mikeybycrikey
After reading a post from Roger yesterday stating that the PE across the long-term cycle should be about 11 or 12, it got me thinking about what the longer-term profit estimates might be, given the current SP of 226.
That means I'm looking for a total discounted profit over ten years of 205 cps (average 20.5 cps or (226/11) per year)....
I firmly believe that a PE ratio should never, ever be used as an input into a calculation of future value, profits etc.
Best Wishes
Paper Tiger
Fundamentals Flaw Technical Types
Quote:
Originally Posted by
Baa_Baa
@PT that would seem to be a remarkable achievement, to basically flatline Value$ while almost halve NPAT?
Good spotting - Neat eh?
I did say that the valuation was based on a cash flow model but put up profits (the difference is related to the capex).
So for FY2016 to FY2020 the cash numbers go:
2016: $419;
2017: $453;
2018: $312
2019: $269;
2020: $498;
and then (with a change to normalised years)
2021: $313;
2022: $322;
2023: $332; etc.
(DO NOT READ the above numbers if you believe there is any possibility of being confused).
So with my model (as with lots of model) the value is based on the sum of the individually weighted values of future years cash flows (the actual details are secret, if I told you I would have to eat you :D).
So simply this means that any one year does not cause a drastic jump in value.
Now the actual reason I settled on presenting the results of a cash flow model is that the results for a profit based model are a lot more scary and more in line with what you are obviously expecting. :t_down:
Best Wishes
Paper Tiger
I hope you have made a mistake, otherwise I have
Quote:
Originally Posted by
James108
Not at all, why would a company be valued based on a $600M NPAT when 4 years later you know NPAT will almost half (for the purposes of his model).
On a per share basis $300M (half of $600M) is only 22 cents and not all of this will leave the business in the form of dividends. So you would expect the value of the company to drop by less than 20 cents/share over 4 years.
If $300M is $0.22 per share then that implies 1.364 billion shares as opposed to the current 1.123 billion and thus an increase of 240 million.
Is there really that much in management incentives kicking around?
Best Wishes
Paper Tiger
Need (Medicinal) Brandy - And Lots of It - Now
Quote:
Originally Posted by
James108
You are right, that is the problem with using your mouse to operate a calculator.
Good, I can stop having a heart attack then !
Best Wishes
Paper Tiger