At these sort of prices, I'd be off loading faster than a straight ski run from the top of Treble Cone ski field.
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At this point in time I remain loyal .....even though recent travels did remind me that airline business is just a commodity item and there ain't much difference between airlines anyway. Air seem to be one of the more efficient ones (operationally) so probably has the best prospects
Hate this modus operandi on long haul - give them dinner and then turn the lights off and hope most passengers sleep so they don't have to do too much for them. After 5 or 6 hours in the dark how the heck can you even tell what airline you are flying with anywhere
Still pretty low PE ratio couta...even without any earnings upgrade
At $2.87 AIR trades on a 2017 PE of 9 based on my forecast of 32 cps. Their ten year average PE is 11. I defy anyone to accurately state what part of the airline cycle we are currently at. It seems to me competition is starting to become somewhat ameliorated from the peak intensity of late 2017. AIR management seemed very confident of improving yields going forward at their most recent conference call and are undoubtedly in the best position to know. I won't say what I think they're worth after getting egg on my face last year...all I will say is that those in this for the fully imputed dividends are very well positioned as we're only 2 years away from the completion of a very thorough fleet upgrade bringing the average age down to a very young 6.2 years. This hounds long range nose can smell those XXXXXXL special dividends coming after that major capex program completion along with regular six monthly ~ 10 cent fully imputed feeds in the meantime to keep him well fed and watered. Investing in an airline for long term dividend income might seem like a contradiction to common sense conventional investment theory but it makes perfect sense to me. Whether the stock is $2, $3, or even $4 makes no difference to me.
On a relative basis AIR seems at least as good value as QAN in my opinion.
Market seems to think there's an imminent profit upgrade coming. Could be some grounds to think that as I've thought for some time now their official forecast for FY17 of circa $500m was is very conservative. Certainly the first half performance set them up for the year very well.
yep, on their average PE, the price is easily $3++, but I'd settle for $3.10/15, and leave a bit for someone else:p (and make it snappy - I have a good use for the funds in the next little while)
At the time I did think $500m could have been realistic, given their comments about tailwinds turning to headwinds, but they seem to be basking under a big H at the moment, getting on with business. So now I think we can say they were just shaggy dog stories
Your all heart Xerof, don't you feel sorry for all those poor buggers buying in at those prices, the bit left on the table won't be any consolation when the whole table is ripped from under them.:eek2:
I topped up a few more at $2.76 this week so unsurprisingly I hold a different view. My thinking is that their business model has evolved a fair bit under Chris Luxon's leadership with a lot of code / revenue sharing and a more modern simplified fleet. I also think they have a laser focus on more prudent expansion in the future and will only expand routes where there's proven demand. Fact is we are looking at the second highest profit in FY17 when they've been subjected to very intense international competition so I think their business model is actually now very resilient. I expect they'll continue to perform very well for the foreseeable future, (acknowledge that comes with a caveat that we don't experience a GFC MK2), and as stated above shareholders can look forward to some very special dividends once their comprehensive fleet upgrade program is completed in FY19.