AIR - Air NZ.

[Beagle]

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.

[Joshuatree]

Yes, leave it at that, good idea.But thats impossible for you ehh.
Sensible conservative margin forest imo. A good safe benchmark to work from esp on such a volatile , surprising and a so many parts to stock.
So many fingers and hands and limbs lopped off buyers this week . Katmandhu have some sleeveless down jackets on special still.

[mikeybycrikey]

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.

Considering that I feel like the GFC largely bypassed NZ, I don't think it's that unreasonable to include the margins from 2007.

In places like the United States, Ireland, Spain, etc, etc the property market fell like never before, dropping up to 50% in some places. In New Zealand and Australia we didn't even come close to that. Did property prices even fall at all in NZ?

How much has dairy dropped by? Maybe our GFC is still coming?

[Beagle]

Mikey, perhaps try telling the people that lost serious money in the finance company fiasco's, ($6 billion in total apparently), that the GFC bypassed us.

I think rather than engage in debate with those who appear to have their own agenda and are making their own amateur efforts to predict future margins its overdue we considered what the professionals are predicting.

First lets take a simple reality check. We all know lots more competition is coming and some is here already. We all know the effects of this are already being felt and will largely be in effect for much of FY17 and will be in full effect for the entire FY18 year. Analysts are also predicting fuel prices to return to some sense of normality by Fy18..we know yields move with fuel prices so even if they're different from the so called normal level, yields will adapt themselves so profit won't be materially different.

http://www.4-traders.com/AIR-NEW-ZEA...07/financials/ Here we see the professional analysts are predicting, two years after the so called peak of the cycle that EDITDA margins will be 19.89% with all the effects of the extra competition. We can also see they're predicting EPS of 38.8 cps. 10 year average PE is 11 and interest rates are at 60 year lows so there's an argument for some PE expansion. If we attach an average PE of 12 to say average earnings of say 38.8 cps, (I will leave you folks to do the maths) we can see the potential for a steep recovery in the SP once all the uncertainty of extra competition and the VAH matter is successfully concluded.

Consensus broker valuation is $2.82.

[Snow Leopard]

Mikey, perhaps try telling the people that lost serious money in the finance company fiasco's, ($6 billion in total apparently), that the GFC bypassed us.

I think rather than engage in debate with those who appear to have their own agenda and are making their own amateur efforts to predict future margins its overdue we considered what the professionals are predicting.

First lets take a simple reality check. We all know lots more competition is coming and some is here already. We all know the effects of this are already being felt and will largely be in effect for much of FY17 and will be in full effect for the entire FY18 year. Analysts are also predicting fuel prices to return to some sense of normality by Fy18..we know yields move with fuel prices so even if they're different from the so called normal level, yields will adapt themselves so profit won't be materially different.

http://www.4-traders.com/AIR-NEW-ZEA...07/financials/ Here we see the professional analysts are predicting, two years after the so called peak of the cycle that EDITDA margins will be 19.89% with all the effects of the extra competition. We can also see they're predicting EPS of 38.8 cps. 10 year average PE is 11 and interest rates are at 60 year lows so there's an argument for some PE expansion. If we attach an average PE of 12 to say average earnings of say 38.8 cps, (I will leave you folks to do the maths) we can see the potential for a steep recovery in the SP once all the uncertainty of extra competition and the VAH matter is successfully concluded.

Consensus broker valuation is $2.82.

Good to see that whilst not wanting to engage with 'amateurs' with 'agendas' in the same post we then get the agenda of this particular amateur.

We are asked to consider what the professionals are predicting including their consensus valuation of $2.82 whilst at the same time this amateur, with very little knowledge of how to value airlines, says they are wrong and it should be $4.65.

So, has he wishes, no debate with Roger, ignore his constant stream of ill-informed posts.

But maybe the rest of us can educate ourselves on the airline industry in general, Air New Zealand in particular and the dark secrets of real fundamental analysis of this sector of the share-market.

Best Wishes
Paper Tiger

[winner69]

I can sense Carters outrage at the temerity of a shareholder casting aspersions on senior managers behaviour re their share dealing (assuming he's to actually see the email)

The response will be all approvals have given and they are totally confident that management do the right things.

Whatever, management have been pretty canny/clever/lucky this time around at selling at very good prices before the 'collapse ' of the share price.

Shareholders should be pleased that top management are so canny/clever/lucky - good attributes to have in running a business

[h2so4]

Perhaps we should be doing the opposite of what the professionals are predicting. LOL!

[Jay]

Consensus average dividends for the next three years off 4 traders is 22 cps fully imputed so 22/ 0.72 = 30.56 cps = 13.52%.

At that rate something has to change - surely, either the sp increases or the dividend will not be as high, if only we could predict which one!

[777]

I can sense Carters outrage at the temerity of a shareholder casting aspersions on senior managers behaviour re their share dealing (assuming he's to actually see the email)

The response will be all approvals have given and they are totally confident that management do the right things.

Whatever, management have been pretty canny/clever/lucky this time around at selling at very good prices before the 'collapse ' of the share price.

Shareholders should be pleased that top management are so canny/clever/lucky - good attributes to have in running a business

It will still inform them that there are shareholders out here that watch what they do and not all are in agreement with their actions. If top management in NZ were so fantastic then the Shareholders Association would never have been formed.

Emails such as Roger's at least makes them have a look at what has taken place and they can perhaps do better next time.

Shareholders own the company not the managers. They are just employees of the company.

[Joshuatree]

How To Lose Friends And Influence People by Roger Ramjet
What a condescending post!
Note all the "WE's" (I count 7 )as if he is speaking for all of us!!!. Speak only for yourself!!
Speaking of Agendas never has one been so driven as him ; many hundreds of posts on here; many back up the truck and load up in the high $2..A stopped clock is right twice a day!.

Whats the finance fiasco got to do with anything including HBL!!!.

Good point H2SO4 Doing the opposite to the" professionals" is often a good tactic.they have so many agendas of their own like looking after the "smart" money above all else.

AIR has always been a traders cyclic dream and if Instos have made the decision to sell down/out they will keep going until they've finished regardless of the s/p.Then just maybe one can hope for a new cycle and make some dough.

Its great to have ALL opinions on here esp conservative balanced ones

Mikey, perhaps try telling the people that lost serious money in the finance company fiasco's, ($6 billion in total apparently), that the GFC bypassed us.

I think rather than engage in debate with those who appear to have their own agenda and are making their own amateur efforts to predict future margins its overdue we considered what the professionals are predicting.

First lets take a simple reality check. We all know lots more competition is coming and some is here already. We all know the effects of this are already being felt and will largely be in effect for much of FY17 and will be in full effect for the entire FY18 year. Analysts are also predicting fuel prices to return to some sense of normality by Fy18..we know yields move with fuel prices so even if they're different from the so called normal level, yields will adapt themselves so profit won't be materially different.

http://www.4-traders.com/AIR-NEW-ZEA...07/financials/ Here we see the professional analysts are predicting, two years after the so called peak of the cycle that EDITDA margins will be 19.89% with all the effects of the extra competition. We can also see they're predicting EPS of 38.8 cps. 10 year average PE is 11 and interest rates are at 60 year lows so there's an argument for some PE expansion. If we attach an average PE of 12 to say average earnings of say 38.8 cps, (I will leave you folks to do the maths) we can see the potential for a steep recovery in the SP once all the uncertainty of extra competition and the VAH matter is successfully concluded.

Consensus broker valuation is $2.82.