AIR - Air NZ.

[OldGuy]

I'm interested in seeing where it goes in the next couple of days :eek2:

why? Are you desperate to enter or exit in the next couple of days?

[forest]

Well positioned comes to mind,certainly no reason for the recent price drop in this presentation.

Not to sure couta1, read this bit specially the last part.

Benefit of FX hedges in 2016 not
expected in 2017
8
Key factors support sustainable
profitability through the cycle…
Increased competition
 Continued inbound tourism strength
Corporate brand and employee  engagement has never been stronger
 Scale efficiencies from fleet programme
 Leveraging alliance partnerships
Fuel price outlook continues  to be favourable
We see further opportunity for growth, but recognise
the environment will be different
…with some near-term
challenges ahead
2017
Impact
Unknown
~$120M
Expect 2017 earnings will be solid,
while not at the level of 2016

[workingdad]

why? Are you desperate to enter or exit in the next couple of days?

Top up again to mitigate some of the losses but in the medium term get rid of them again. I bought back in thinking it was oversold only to see it decline considerably further and wonder about some of the unknowns, in particular the VAH situation.

[OldGuy]

why adopt such a short timeframe? Why not wait a year and see what happens? At current prices, this stock is so far underpriced its incredible.

[Balance]

Top up again to mitigate some of the losses but in the medium term get rid of them again. I bought back in thinking it was oversold only to see it decline considerably further and wonder about some of the unknowns, in particular the VAH situation.

Caution : Top up to mitigate losses - similar to averaging down.

[workingdad]

why adopt such a short timeframe? Why not wait a year and see what happens? At current prices, this stock is so far underpriced its incredible.

I have concerns about the medium to long term economics/fundamentals of ours and international markets and cashed up my holdings over the last few months. I bought back into AIR for a quick turnaround as earnings season in the US wasn't the catalyst it could have been so happy to play a short term game and not be tied up in a buy and hold. The market has been like a bipolar person off medications.

That's my take on things and as per the black Monday thread there are those on either side of the fence.

[OldGuy]

with an expected gross dividend yield > 10%, I am very happy to hold. But each to their own!

[workingdad]

Caution : Top up to mitigate losses - similar to averaging down.

Yes it is, but at least buying more as it is coming back up is better than buying more as it was coming down :ohmy:

I don't think there would be a shortage of us on here that don't think AIR has been unjustifiably punished and no one can say with any certainty what will happen to any stocks SP in the future but its not a stretch to think AIR was going to bounce back a bit.

[winner69]

Were these presentations yesterday? Or today

[OldGuy]

just released this morning, winner. Not sure if there was any corresponding meeting etc

[forest]

Were these presentations yesterday? Or today

How could any guru analyst not be impressed with that - upgrades i reckon

What about this bit that 2017 profits will be solid but not at the level of 2016. I would not call that an upgrade.

[OldGuy]

Forest, even if next years earnings were half of 2016, this stock would still be cheap relative to earnings. In fact, it would still have a PE of only about 10. Many others in the NZX50 are trading on PEs of closer to 40!~

[OldGuy]

Market seems happy if the first 10 mins are anything to go by! :cool:

[sb9]

Had a quick read of presentation and have decided to stay away from this one. Yield might be good, however capital appreciation (or lack of it) might not be worth the punt for me. Just my perspective though, GLTA.

[forest]

Forest, even if next years earnings were half of 2016, this stock would still be cheap relative to earnings. In fact, it would still have a PE of only about 10. Many others in the NZX50 are trading on PEs of closer to 40!~

True, but being an airline stock it is not unusual to get a number of years of declining profits following each other. Remember AIR Chief Strategy sold an substantial share holding recently as well as CFO and Group Council, between them there much be a good understanding of the company.

[OldGuy]

Sorry, but I don't interpret those sales as being a forebearer of gloom. Insider trading rules are pretty clear, and I think senior management know that....

[OldGuy]

Anyway, let's review this in a couple of year, which is my investment horizon. Anything between now and then is largely irrelevant to me personally.

[couta1]

Bottom line for me is its a blue chip stock currently selling at a discount with increasing divvys, happy to hold even though currently in the red.

[Mickey]

Sorry, but I don't interpret those sales as being a forebearer of gloom. Insider trading rules are pretty clear, and I think senior management know that....

Agree OG - I work for a large company and the Executive only have a limited number of sell windows per year, which is why you see the sales appear within the same timeframe. I don't read anything negative into it at all either.

[workingdad]

Market seems happy if the first 10 mins are anything to go by! :cool:

Same as yesterday but lets see if it holds or if the sellers start lining up again....

[dobby41]

A couple of weeks ago people here were celebrating $3.
People will see and read into messages what they want to see in them - confirmation bias.
Very interesting following this discussion over the last month - reality is what actually happens not what you want to happen or what the fundamentals (yours) say should happen.

[couta1]

A couple of weeks ago people here were celebrating $3.
People will see and read into messages what they want to see in them - confirmation bias.
Very interesting following this discussion over the last month - reality is what actually happens not what you want to happen or what the fundamentals (yours) say should happen. One must stand firm on ones convictions and not be swayed by opinions then confirmation bias becomes only a coincidence.

[Balance]

I think there's a far far too much volume in this sell off to attribute it to the sheeple, the flock cannot muster anywhere near enough shares (or cognisance) to account for the volume sold. This is big smart money aggressively taking profits, for whatever reasons, selling to the knife catchers, who one might argue are the sheeple.

BAA

Hmmm .... big smart money?

Knife catchers are deftly flicking the knives back at the sellers?

[GR8DAY]

same as yesterday but lets see if it holds or if the sellers start lining up again....


.....looking different today wd. The sillyness could be over. Expect close $2.65/67?

[workingdad]

.....looking different today wd. The sillyness could be over. Expect close $2.65/67?

Lower volume alright. Either way I'm ok with it. Buying more if it comes back and as it climbs red turns to green ;)

[winner69]

On a more serious note

@AirNZFairy: To kick off the celebrations I'm giving away the below. To be in to win you need to guess what the picture is of :) https://t.co/ULMvtL32uq

[Onion]

Hmmm .... big smart money?

Knife catchers are deftly flicking the knives back at the sellers?

I think it is a long time since AIR actually used real knives anyway - how much damage can a flimsy plastic one do?:)

P.S. I caught a few of the knives at $2.65 so until that is surpassed I am nursing a minor wound.

[dobby41]

.....looking different today wd. The sillyness could be over. Expect close $2.65/67?

Famous last words.

[sb9]

Surprisingly bit muted response today from our biggest AIR supporter, Roger....

And in the meantime more staff sales...
https://nzx.com/companies/AIR/announcements/281736

[Beagle]

The VAH result I posted about yesterday was a real shocker and I think wanting to sell a flea ridden mutt and actually doing it are two completely different things which begs the question seeing as VAH is presently trading at a loss and at a gearing ratio of 6:1 debt to equity what do AIR's directors do if they can't sell and VAH need another equity injection ? Further, Is the short term loan they recently made within VAH's capability to repay it without an equity injection...I'd have to speculate it isn't.

The $120m of exchange rate tailwind not repeating in FY17 was also a bit of a shock, but with recent exchange rate strength we may see a little less than $120m impact. Consensus analyst estimates for FY17 of 55 cps are going to be downgraded, that is absolutely certain in my opinion. Too difficult to know if consensus analyst estimates of 42 cps for FY18 will change and by how much. AIR's management see yields normalising once new capacity is established and with intrinsic tourism growth but over what timeframe ? Medium term suggests yield compression exists for some / all of FY18 ?

Interesting that they are already planning of shifting capacity onto the Houston route in response to AA's new service.
Fair value for the stock must come back with the VAH matter and FY17 downgrade...by how much is the question and over what timeframe will yields normalise is the other key question.
Less bullish than I was... At this stage my early thinking is somewhere around $650m underlying profit before tax for FY17, about 44 cps after tax, well south of present consensus analyst estimates.
I have pulled back this year's estimate to $850m, no contribution from VAH and less 2H RPK growth than I was previously estimating).

Not intended to be advice and preliminary thinking only. DYOR. Consensus broker fair value is presently $3.16...I see this coming back by 20-30 cents, effect is roughly split evenly because of the VAH fiasco and FY17 earnings downgrade. A successful sale of VAH even at the current market price of VAH shares could see a pop of approx. 20 cps as I think most analysts have or will be heavily writing down the value of VAH in their valuation models.

Given the uncertainty of the VAH sale process and the diabolical state of that company and the FY17 downgrade I'm not expecting a recovery to $3 any time soon, with the obvious caveat that a quick and successful sale of VAH could have precisely that effect or close too it, but I for one won't be holding my breath.

I am disappointed with managements systematic selling down of shares and I find the timing of this a little disconcerting. Management would have known last week when they were selling that there was an investor day this week wherein they were going to downgrade FY17 earnings. Sailing pretty close to the wind in terms of the insider trading rules there by my reckoning.

[stoploss]

Quote Roger "I am disappointed with managements systematic selling down of shares and I find the timing of this a little disconcerting. Management would have known last week when they were selling that there was an investor day this week wherein they were going to downgrade FY17 earnings. Sailing pretty close to the wind in terms of the insider trading rules there by my reckoning."

You thinking of having a word with the shareholders association and AIR NZ Directors/Management a la SUM ?
I would have thought AIR.NZ would have had more robust policies in place anyway , especially compared to SUM.

[Beagle]

Quote Roger "I am disappointed with managements systematic selling down of shares and I find the timing of this a little disconcerting. Management would have known last week when they were selling that there was an investor day this week wherein they were going to downgrade FY17 earnings. Sailing pretty close to the wind in terms of the insider trading rules there by my reckoning."

You thinking of having a word with the shareholders association and AIR NZ Directors/Management a la SUM ?
I would have thought AIR.NZ would have had more robust policies in place anyway , especially compared to SUM.

Its not quite as blatant as the SUM transgression but it seems to me to be pretty disappointing conduct...what do you other folks think ?

[forest]

I fully agree with your last 2 post and like the detail you give in post no 6041

[workingdad]

Some high volume this afternoon and SP held up well.

Another great post Roger. I think its pretty spot on and with VAH being treated as fair value on profit/loss AIR will be taking a hit on full year results if they haven't sold them off.

[Raz]

Its not quite as blatant as the SUM transgression but it seems to me to be pretty disappointing conduct...what do you other folks think ?

Well i pondered at the weekend how the executives would be thinking how to spend the proceeds of their shares and if I had done the same thing, similar context, three years ago when i was an executive in the US, rightly or wrongly, yes I would have the money yet be expecting a SEC probe. After this weeks disclosures just makes it worse.

[Beagle]

Agree with what you've said Raz. FMA are a completely different kettle of fish though in my experience. I have given this a bit of thought this afternoon and suspect if I did go to the considerable trouble to formulate a complaint that AIR management would get away with their conduct on a technicality. Thing is, (notwithstanding the market perception for earnings in FY17 by consensus analyst view being ostensibly the same as FY16 earnings), formal guidance for FY17 by AIR management themselves had not been formally issued before so technically one can't say it was a downgrade per se.

It was inconsistent with market expectations YES but didn't amount to a formal downgrade of previously issued company guidance...i.e. this was first formal AIR management guidance for FY17. In my view they would have been in clear breech of insider trading laws if previously issued company FY16 guidance of $800m+ before tax was downgraded.

I might yet find the time to take this matter up with Tony Carter either before or at the next annual meeting as I am sure the board want to encourage management to be seen to be conducting themselves with the upmost integrity at all times. Classic case of some older wisdom required to be dispensed by the Chairman here in my opinion.

[stoploss]

Surprisingly bit muted response today from our biggest AIR supporter, Roger....

And in the meantime more staff sales...
https://nzx.com/companies/AIR/announcements/281736

Not a good sale price ........

[Poet]

"formal guidance for FY17 by AIR management themselves had not been formally issued before so technically one can't say it was a downgrade per se"

That's true in a strict sense Roger, but nevertheless presumably the management knew at least a week ago that they were going to inform the market in this week's investor briefing that next year's earnings would be below this year's earnings. So on the face of it, at the time they were dumping the free shares that we gave them for doing such a good job of looking after our interests, they were in possession of relevant insider information that had not yet been released to the market (that information could have been released a week ago, prior to their selling spree, but if they had done that maybe they wouldn't have got as much for those shares)

[Balance]

Well i pondered at the weekend how the executives would be thinking how to spend the proceeds of their shares and if I had done the same thing, similar context, three years ago when i was an executive in the US, rightly or wrongly, yes I would have the money yet be expecting a SEC probe. After this weeks disclosures just makes it worse.

The assumption that all the executives who sold are privy to all the numbers - normally that is not the case, just the CEO, CFO and directors.

AIR did release the presentation as Price Sensitive.

Agree however not a good look.

[winner69]

.......

I remain of the view that this conduct is extremely disappointing and I would have expected better standards of behaviour from senior AIR management.

Are you really surprised?

Too much money invariably changes peoples standards .......

[Baa_Baa]

When all said and done its only a few hundred thou shares these management are moving, but each one has a magnifying effect because insiders are cashing up … suggesting recent SP is as good as it gets and they don't want the sunk capital or dividends. Still minnows judging by the volume moving, so it will pass, while we all try to figure out who the real money is that's moving the SP. Nice to see some objective balanced discussion and viewpoints.

[Poet]

The assumption that all the executives who sold are privy to all the numbers - normally that is not the case, just the CEO, CFO and directors.

AIR did release the presentation as Price Sensitive.

Agree however not a good look.

AIR's policy on share trading requires key personnel to obtain permission from CFO/CEO or board before buying or selling.

[Beagle]

"formal guidance for FY17 by AIR management themselves had not been formally issued before so technically one can't say it was a downgrade per se"

That's true in a strict sense Roger, but nevertheless presumably the management knew at least a week ago that they were going to inform the market in this week's investor briefing that next year's earnings would be below this year's earnings. So on the face of it, at the time they were dumping the free shares that we gave them for doing such a good job of looking after our interests, they were in possession of relevant insider information that had not yet been released to the market (that information could have been released a week ago, prior to their selling spree, but if they had done that maybe they wouldn't have got as much for those shares)


AIR's policy on share trading requires key personnel to obtain permission from CFO/CEO or board before buying or selling.

Agree with what you've said 110%. You have considerably more shares than I, would you like to take your concerns up with Chris Luxon or Tony Carter on other shareholders behalf mate ?
PM me if you need C.L.'s e.mail address.

[Beagle]

Are you really surprised?

Too much money invariably changes peoples standards .......

I am to be honest mate. These are people who's salary package is already extremely generous so they shouldn't need to sail anywhere near the line with their share transactions and I think that point needs to be made to them in a forthright manner. Maybe someone needs to write a letter to the editor of the herald pointing out all the management selling in the week leading up to the profit downgrade so AIR management get put under the spotlight for the wrong reason. The halo has slipped very badly here. While we are peering down the dark well that sailing so close to the wind with share sales represents...a real cynic might even ponder if certain AIR management had some advance knowledge about the likelihood of VAH posting such a grim Q3 result yesterday when they were selling last week ?..not suggesting they did or didn't just wondering... No matter how you slice and dice this thing...its not a good look. Really meaningful management share sales last week just before bad news on VAH on Monday and profit downgrade on Tuesday :ohmy:

[Poet]

Agree with what you've said 110%. You have considerably more shares than I, would you like to take your concerns up with Chris Luxon or Tony Carter on other shareholders behalf mate ?
PM me if you need C.L.'s e.mail address.

Might very well do that after some consideration Roger.

A couple of extra thoughts occur to me though

Firstly, I must admit that AIR management predicting a lower profit next year wasn't exactly a surprise to me (and I'm guessing it wasn't a surprise to you either:), pretty much in line with our expectations as a cyclical company and we've discussed as much here before) so I can't really claim to be disadvantaged. My actions re my shareholding wouldn't have been different if they had announced this a couple of weeks ago

Secondly, I'm also inclined to believe that the share price might actually be lower now if the order of events had been reversed ie if they had announced the lowered 2017 profit expectation and then management had started to sell, what do you think?

[Beagle]

Might very well do that after some consideration Roger.

A couple of extra thoughts occur to me though

Firstly, I must admit that AIR management predicting a lower profit next year wasn't exactly a surprise to me (and I'm guessing it wasn't a surprise to you either:), pretty much in line with our expectations as a cyclical company and we've discussed as much here before) so I can't really claim to be disadvantaged. My actions re my shareholding wouldn't have been different if they had announced this a couple of weeks ago

Secondly, I'm also inclined to believe that the share price might actually be lower now if the order of events had been reversed ie if they had announced the lowered 2017 profit expectation and then management had started to sell, what do you think?

Management should be aiming to follow the highest ethical standards and be seen to be doing so, i.e. perception is just as important as the execution of transactions themselves. Its not just about following the barest minimum legal rules as I've eluded too above. The $120m exchange rate matter caught me by surprise, (depending on future exchange rates some of this may be mitigated) as did the VAH loss, (more than hefty doses of flea powder is required there), so yes FY17 will be materially lower than I was previously expecting and if I'd known those things a couple of weeks ago I would not have added at $2.78.

I don't think it's worth getting into a theoretical about if they'd reversed the order...all that matters is are they in breech of the insider trading regulations and / or the companies own governance policies for management share transactions. What about the share sale referred to in the link above. Mr Morgan selling a whopping 350,000 shares one trading day before what amounts to a profit downgrade.

The other technicality management will cling too is this. The SP actually went up significantly after the release of information contained in today's investor briefing so management could make the case that it contained price sensitive information that was positive, (slightly bizarre I know). They could argue that their expectation of yield recovering in the medium term, (FY18 onwards) was good news for the company and DCF modelling using higher long term anticipated yields is a positive for the market. Another useful technicality for management to assert one thinks...

Time for dinner I think...its been an interesting day.

[winner69]

When all said and done its only a few hundred thou shares these management are moving, but each one has a magnifying effect because insiders are cashing up … suggesting recent SP is as good as it gets and they don't want the sunk capital or dividends. Still minnows judging by the volume moving, so it will pass, while we all try to figure out who the real money is that's moving the SP. Nice to see some objective balanced discussion and viewpoints.

The day the CFO hocked off nearly 400,000 shares that was just under 20% of the days turnover .... and that was just a week after he hocked off 200,000 odd

The 400,000 odd he got over $3 - must believe in TA and used TA as the signal to sell - Hoop would be proud of him

Like must accountants he pretty canny that CFO

Disclosure - think I read the notices properly

[axe]

is any one else having trouble viewing the AIR thread ? it keeps giving me an error "not found" :(

[winner69]

is any one else having trouble viewing the AIR thread ? it keeps giving me an error "not found" :(

Share price up 15 cents this week - was that what you couldn't find

[winner69]

Incentive schemes like this Air NZ one align management interests with those of shareholders - ie enhance/maximise shareholder wealth

So as Chris, Rob et al enrich themselves by playing within the rules of the game what's all the fuss about - after all they have shareholder's interests at heart

[OldGuy]

Does anyone actually know how often AIR NZ execs are permitted to sell each year? And, would it not make sense for some of them to sell out given the recent rapid drop in SP if they don't have another opportunity for a few months?

While I accept there could be some element of unethical/inside trading involved, you can't point straight to that every time an exec sells shares. It makes you look a bit silly IMHO :)

[stoploss]

Does anyone actually know how often AIR NZ execs are permitted to sell each year? And, would it not make sense for some of them to sell out given the recent rapid drop in SP if they don't have another opportunity for a few months?

While I accept there could be some element of unethical/inside trading involved, you can't point straight to that every time an exec sells shares. It makes you look a bit silly IMHO :)

I think the point is they have sold . Then a profit guidance has been released , mentioning increased competition etc . It's not the fact someone has sold some shares , it's in the timing re the release of a price sensitive announcement . Surely some of the management were aware of this information , so you can question the reasoning behind the sales .....

[OldGuy]

That is just one possible explanation. Inference is difficult. Poor inference is easy.

[mikeybycrikey]

Obviously with insiders it is hard to prove or disprove any allegations that they have acted wrongly or with poor judgement. They all have information that we don't and we trust that they don't profit from that information in ways that we can't. We'll never prove it either way.

It's good to see the disclosure that David Morgan sold out at $2.50 hasn't swayed anyone from thinking that insiders are cashing in at the height of the boom.

Anyway, how does one get an invite to this Investor Day? Surely between all of the holders here on ST we must own a good chunk of their stock. Enough for someone to get on the guest list. Or is it just open to bankers and fund managers?

[sb9]

It's good to see the disclosure that David Morgan sold out at $2.50 hasn't swayed anyone from thinking that insiders are cashing in at the height of the boom.


That opinion might change if we were to see another disclosure today of someone selling y'day at the peak?

[Beagle]

Management are very fortunate that the SP has tracked north since the VAH announcement on Monday and the investor day presentation on Tuesday. Knowing how the FMA and NZX work this gives them a very convenient defence against any suggestion that the actual release of that information was price sensitive in a negative way. Having invested a huge amount of time in the SUM matter and hundreds of hours working with the Securities Commission on a finance company matter in years gone by I believe this convenient SP bounce would render any further enquiries on this matter as ineffective. I believe you good folks already know my view on the morality of this matter though...Greed, self interest and human nature are seldom pretty things to watch as they play themselves out...over and out from me on that matter.

I can only conclude from the release of yesterday's investor day information that institutions took some comfort from management's belief that yields will normalise in the due course of time and seeing as launch specials are normally limited time frame events for other airlines to build demand and establish their new route management probably have a reasonable basis to be thinking the way they are.

I guess that begs the question of what is fair value at present now we know VAH is a cancerous pup and FY17 is a fairly reasonable sized downgrade to FY16. For me a lot depends on the successful extrication from VAH. If they can do that I can see $3 again in the foreseeable future, without that I see the SP tracking mostly sideways with swings up and down depending on market sentiment and any other new competitors that might enter the market or any other new route AIR are embarking on. I see the SP was $2.55 at the end of June 2015..history could easily repeat this year in my opinion.

$2.60 plus or minus 20 cents in the meantime till VAH is sold. My 2 cents but DYOR and this is not a recommendation one way or the other. For what its worth if anyone is interested, I am not looking to add any shares to my modest position at this stage.

[workingdad]

Interesting stand off for the last 20mins on AIR. No shares traded and sellers locked at 2.57. Who will flinch first......

[Tony Two Gloves]

Well I guess we know who flinched now...........was beating myself up for not buying at $2.50 a couple of days ago, think $2.35 may be quite realistic now.

[BeeBop]

Well I guess we know who flinched now...........was beating myself up for not buying at $2.50 a couple of days ago, think $2.35 may be quite realistic now.

And I was happy I had got back in at 2.51! Mind you, I am in for the longer term yield. Was surprised to see the 2.60+ yesterday so quickly. I can never catch stocks at the tops or bottoms so always happy to buy something I believe in at a price that I haven't had to chase and fits with the portfolio.

[trader_jackson]

For everyone's knowledge... (not sure if it has already been mentioned)

Forsyth slashes 12 month target price from $3.30 to $2.80 noting the "cycle now turning against AIR", "with competitive pressures beginning to impact and fuel prices rising"

Lowering the price target was mainly as a result of:
- Earnings Revisions to FY17 estimate
- Applying historic average (to price to book valuation) as opposed to premium
- Reducing market PE relative multiple given increasingly defensive nature of domestic market

Although I don't follow AIR in-depth, I did happen to see it's share price performance has been "adverse" recently... personally, I'm expecting AIR to be more volatile than ever

As always, DYOR, and hopefully this was of use

[Beagle]

Ouch. Basically writing off the value of VAH, which I agree with and another 20 cents as well for earnings downgrade in FY17. This analyst downgrade won't be the only one coming... that's for sure.

[skid]

Obviously with insiders it is hard to prove or disprove any allegations that they have acted wrongly or with poor judgement. They all have information that we don't and we trust that they don't profit from that information in ways that we can't. We'll never prove it either way.

It's good to see the disclosure that David Morgan sold out at $2.50 hasn't swayed anyone from thinking that insiders are cashing in at the height of the boom.

Anyway, how does one get an invite to this Investor Day? Surely between all of the holders here on ST we must own a good chunk of their stock. Enough for someone to get on the guest list. Or is it just open to bankers and fund managers?

Hard to prove they acted wrongly (like insider knowledge)but you could make a better case for poor judgement.
They need to get these share sales over and done with so things can carry on from there--never a dull moment these days.

[skid]

Ouch. Basically writing off the value of VAH, which I agree with and another 20 cents as well for earnings downgrade in FY17. This analyst downgrade won't be the only one coming... that's for sure.

I personally wouldnt be so quick to write of VAH--Strategic importance to some particular airlines cant be ruled out,even if their balance sheet is not great

[Beagle]

I personally wouldnt be so quick to write of VAH--Strategic importance to some particular airlines cant be ruled out,even if their balance sheet is not great

I'll be happy when proven wrong but we saw a really grim Q3 result and outlook with Monday's VAH announcement and if they can't make money when oil is this low when other airlines are making record profits...

[Baa_Baa]

Ouch. Basically writing off the value of VAH, which I agree with and another 20 cents as well for earnings downgrade in FY17. This analyst downgrade won't be the only one coming... that's for sure.

If they're basically writing off the value of VAH, does that mean/imply they have low confidence of a sale? Might be stuck with VAH for some time perhaps, which if performance doesn't improve will mean shoring up the balance sheet again in due course. What a debacle.

[Baa_Baa]

Hard to prove they acted wrongly (like insider knowledge)but you could make a better case for poor judgement.
They need to get these share sales over and done with so things can carry on from there--never a dull moment these days.

More notices these past two days, one insider sells 350k, while against the trend another insider converts options to buy 94k. So at least it's not all selling.

[Beagle]

If they're basically writing off the value of VAH, does that mean/imply they have low confidence of a sale? Might be stuck with VAH for some time perhaps, which if performance doesn't improve will mean shoring up the balance sheet again in due course. What a debacle.

To be clear I am ostensibly writing it off in my assessment of AIR, not Forbar, (but I have heard rumours some brokers have a very low value for VAH in their valuations), but you are dead right, with the recent loan to VAH and about face to try and sell and then the shocker announcement of a statutory loss of nearly $60m for Q3 and grim outlook statement its turning into a real fiasco.

[skid]

To be clear I am ostensibly writing it off in my assessment of AIR, not Forbar, (but I have heard rumours some brokers have a very low value for VAH in their valuations), but you are dead right, with the recent loan to VAH and about face to try and sell and then the shocker announcement of a statutory loss of nearly $60m for Q3 and grim outlook statement its turning into a real fiasco.

I was only raising the issue of other forms of value--If China air or Singapore wanted access to OZ via VAH it would have strategic value and would possibly be worth them helping to make it profitable if they could--or just the added traffic could go a ways to do that---But Im by no means assuming this will definitely happen,only raising the possibility---Guess by now we should learn to expect anything.

[winner69]

More notices these past two days, one insider sells 350k, while against the trend another insider converts options to buy 94k. So at least it's not all selling.

Probably sell them tomorrow

[Beagle]

Probably sell them tomorrow

Yes it was only an exercise of free options. I wouldn't be the least bit surprised if they were sold on market today. I think Forsyth Barr are pretty much on the money, fair price target 12 months out is $2.80 assuming reasonable flying conditions between now and then.

Fair enough Skid, as you suggest anything is possible, I know one kind soul that adopts mutts from the pound that nobody wants that would otherwise be put down, (what a great bloke he is) so there's always a chance someone might want VAH for its network, planes and flight slots but operationally it sure is a pup !

[Baa_Baa]

Today looks like a DCB closing on support. Traders dream, Holders not so (esp if they look at the sp every day).

[workingdad]

Today looks like a DCB closing on support. Traders dream, Holders not so (esp if they look at the sp every day).

I have been lately and sold half holdings at 2.57 today during the Mexican standoff, then bought back in at end of day, same $ value but more shares. Do this a couple of times and might just break even...... of course the flip side is losing more if the SP drops further but hopefully support at this level holds :scared:

[Baa_Baa]

I have been lately and sold half holdings at 2.57 today during the Mexican standoff, then bought back in at end of day, same $ value but more shares. Do this a couple of times and might just break even...... of course the flip side is losing more if the SP drops further but hopefully support at this level holds :scared:

True, well done. Don't forget to take into account tax on your trading.

[Kelvin]

The latest new competitor is Hong Kong Airlines, breaking the Air NZ/Cathay monopoly on HKG-AKL. Starts November https://www.facebook.com/hkairlines/?fref=nf

[kiwichick]

Haven't seen this mentioned anywhere else. Air NZ plan to sell VAH by June 30th: http://www.smh.com.au/business/aviation/air-new-zealand-has-quick-timetable-for-virgin-australia-sale-20160503-golln0.htm (http://www.smh.com.au/business/aviation/air-new-zealand-has-quick-timetable-for-virgin-australia-sale-20160503-golln0.html)l

[couta1]

Haven't seen this mentioned anywhere else. Air NZ plan to sell VAH by June 30th: http://www.smh.com.au/business/aviation/air-new-zealand-has-quick-timetable-for-virgin-australia-sale-20160503-golln0.htm (http://www.smh.com.au/business/aviation/air-new-zealand-has-quick-timetable-for-virgin-australia-sale-20160503-golln0.html)l Good find, any sale of the Virgin mutt will send the share price North but if at a premium then it will be a quicker liftoff.

[skid]

If you look at this as a giant game of monopoly---Singapore air may go for a hotel--(owning the airline(VAH) to revamp as they see fit) time will tell...it would be imo the best outcome for AIR as they code share with Singapore air--(article
says alot of their business comes from code share.)

[winner69]

I get the impression that allowing the senior managers to hock of their shares is an extension of the HR strategy of synergistically reinventing team building exercises

[sb9]

Anyone brave enough to catch the falling knives, thought 245 was big support and that line is wiped out completely.

C'mon Hooop, give us an updated chart from TA perspective...

[Tony Two Gloves]

Was just thinking the same, we will be in the $2.30's by COB today.........

[Baa_Baa]

Anyone brave enough to catch the falling knives, thought 245 was big support and that line is wiped out completely.

C'mon Hooop, give us an updated chart from TA perspective...

It's been discussed here http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits&p=618025&viewfull=1#post618025

[Balance]

It's been discussed here http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits&p=618025&viewfull=1#post618025

The smart money was sellers yesterday so will the smart money be the buyers today?

[winner69]

Was just thinking the same, we will be in the $2.30's by COB today.........

Don't be so pessimistic johnny

Afternoon activity maybe >$2.50

[Balance]

Don't be so pessimistic johnny

Afternoon activity maybe >$2.50

Lots of portfolio sales by Forsyth Barr after their downgrade the other day - lots and lots of clients in their portfolio service with AIR?

[winner69]

Lots of portfolio sales by Forsyth Barr after their downgrade the other day - lots and lots of clients in their portfolio service with AIR?

Maybe selling out of AIR for these clients and topping them up with Tegel?

[boysy]

Other high divi stocks are benefiting look at mel and co

[Balance]

Maybe selling out of AIR for these clients and topping them up with Tegel?

That's a thought.

You mean like they did with Feltex, Credit Sails and SCF bonds?

Lovely brokerage for Forsyth Barr eh?

[Ggcc]

Down she goes, where she stops nobody knows. Currently those stocks I thought would be doing well went down.... Lucky I have no spare money otherwise I might become impulsive and buy on a down trend

[skid]

Sometimes you have to pay for your education--i should have known better --was all out but went for the bait.
I should have seen the omen when I was talking to a neighbour and he told me never again (AIR)as they froze on the way back from Hawaii (just like we have done several times before --more than a coincidence.) Hell,I dont even like air New Zealand--they are a mediocre airline touting themselves as premium,and charging accordingly)
I wont tolerate more than a 5% loss though --im out (I may be a slow learner in one way --but not that way--Im not afraid to cut my loses,for better or worse)...nevertheless good luck to all

[Beagle]

That's a thought.

You mean like they did with Feltex, Credit Sails and SCF bonds?

Lovely brokerage for Forsyth Barr eh?

Reminds me of the old line from Wall Street...we're not fund managers here baby, churn em and burn em. Can't see much point myself in selling in the low 240's but I can totally understand why the volatility get's on people's nerves.

[Mickey]

Sometimes you have to pay for your education--i should have known better --was all out but went for the bait.
I should have seen the omen when I was talking to a neighbour and he told me never again (AIR)as they froze on the way back from Hawaii (just like we have done several times before --more than a coincidence.) Hell,I dont even like air New Zealand--they are a mediocre airline touting themselves as premium,and charging accordingly)
I wont tolerate more than a 5% loss though --im out (I may be a slow learner in one way --but not that way--Im not afraid to cut my loses,for better or worse)...nevertheless good luck to all

I was out and came back in as well Skid. I've learnt a few lessons along the way too (and still learning) but the ones I remember well are those occasions when I sold too early - only for the share to recover and head back into green territory. There are no doubt times when it just keeps going south and never recovers but I think those are fewer than those who dip and then recover. I guess it depends on the type of business it is. The one share I followed all the way down was Chorus. I bought some at $2.60 and then it went south. I bought some more at $1.87 when it looked like it had bottomed and then it went down to $1.30's. Then it came back and I finally sold when it was in the low $3's. I should have hung on coz now it's just over $4 (another lesson). Not sure if this one was an exception to the rule but I'm now a little hesitant to sell too soon given previous experiences.

I'm down 11.3% on AIR today and 17.5% on NZR but overall - my portfolio is only down 2.4%. So for me - I'm gonna hang in there as I think AIR is still fundamentally sound (albeit 2017 doesn't look as bright as 2015/16). I might even add a couple more companies to increase my portfolios diversity so as to balance the winners and losers a bit more.

Happy to take onboard advice from others.

[winner69]

This slump in the AIR share price is killing my chances in stocktastic

Another couple of days and it will be doing as bad as VML

[couta1]

Plenty of weak holders to shake out yet, good things take time aye, patience not panic required. PS-Mickey im down 11%on Air and 16% NZR so your not alone.

[OldGuy]

To those of you stressing about the current SP dip: What is your investment horizon? 2 days? 2 months? 2 years???

Seems like you are acting as if you HAVE to sell today...

[skid]

I was out and came back in as well Skid. I've learnt a few lessons along the way too (and still learning) but the ones I remember well are those occasions when I sold too early - only for the share to recover and head back into green territory. There are no doubt times when it just keeps going south and never recovers but I think those are fewer than those who dip and then recover. I guess it depends on the type of business it is. The one share I followed all the way down was Chorus. I bought some at $2.60 and then it went south. I bought some more at $1.87 when it looked like it had bottomed and then it went down to $1.30's. Then it came back and I finally sold when it was in the low $3's. I should have hung on coz now it's just over $4 (another lesson). Not sure if this one was an exception to the rule but I'm now a little hesitant to sell too soon given previous experiences.

I'm down 11.3% on AIR today and 17.5% on NZR but overall - my portfolio is only down 2.4%. So for me - I'm gonna hang in there as I think AIR is still fundamentally sound (albeit 2017 doesn't look as bright as 2015/16). I might even add a couple more companies to increase my portfolios diversity so as to balance the winners and losers a bit more.

Happy to take onboard advice from others.

You may be right --only time will tell--for me there are a number of things Im not liking in the market as a whole and although AIR may still be fundamentally sound,to many things are pointing in the wrong direction for my liking--It can be @$2 and be fundamentally sound--it aint going broke,but the lofty days may well be over as they are not on easy street anymore imo.
From where im sitting they operate on a strategy of charging premium prices, so we will see if that keeps on working for them in this new environment.
For me ,in this environment a smallish loss and a potential lost opportunity is better than possibly a big loss and the game is never really over--there is always possible opportunities at a much lower price...never know.
My dosh is sitting in my share acc.-yours is sitting in AIR shares--thats the only difference atm.

[Mickey]

Y
My dosh is sitting in my share acc.-yours is sitting in AIR shares--thats the only difference atm.

Fair call Skid. It comes down to personal choice and following your own strategies.

[winner69]

TA from a cyclical perspective

Can't get this chart out of my mind - it keeps on coming back to haunt me

Didn't want to ruin punters days completely by adding another steep up curve pre 2007

That was a couple weeks ago - chart that went with it below

Somebody just PM'd me and said hey winner your red line ends at 245 which is spooky

But I was being lazy at the time - in the context of a true cyclical that red line possibly will continue to go down ..... sometime in the future to somewhere where it started (but possibly higher because even cyclicals can cycle higher)

[winner69]

An OBV chart be interesting for AIR - doesn't that tell whether the smart money is buying or exiting?

[babymonster]

sold my Ohe and topped up air

[Raz]

An OBV chart be interesting for AIR - doesn't that tell whether the smart money is buying or exiting?

Still a great trading share, to be honest i was surprised the SP didn't drop like a stone with initial VAH news, it was and is still unlikely they will sell for a wind fall or come out of it well. Australian market has been cutting back capacity all this year. It gave a golden opportunity for Shareholders to exit. Where the SP is at now looks fully price in. Will it overshoot even more?

[Baa_Baa]

Still a great trading share, to be honest i was surprised the SP didn't drop like a stone with initial VAH news, it was and is still unlikely they will sell for a wind fall or come out of it well. Australian market has been cutting back capacity all this year. It gave a golden opportunity for Shareholders to exit. Where the SP is at now looks fully price in. Will it overshoot even more?

I think this is a really good answer to OldGuys post http://www.sharetrader.co.nz/showthread.php?1088-AIR-NZ&p=618816&viewfull=1#post618816 it illustrates the disparity between the views of those who are trading a share and those who are investing in a company.

Investors, possibly those who stake a claim to FA as their investment bias, if we can lump all of them into one category, are probably less likely to be concerned with the day to day share price movements (despite a few whom frequently post here suggesting otherwise).

Whereas Traders, if we can lump anyone who buys weakness and sells strength into a category, are keen on the day to day share price movements and hopefully nimble enough to take advantage.

AIR provides enough characteristics to be an attractive traders share, it is volatile and offers daily spreads between buyer and seller. On the other hand it seems (was?) an attractive investors company offering sustained profitability, EPS and upside into the future.

You couldn't pick a more bi-polar listed company if you tried to, imho. Best to just be sure about your own investing or trading strategy and try not to be overly influenced by the chatter here. Even the best get their comeuppance, whether traders or investors.

AIR does that, alarmingly regularly.

BAA

[janner]

Even the best get their comeuppance, whether traders or investors. /QUOTE]

To be nailed prominently to all our screens. :-))))

[kizame]

I think this is a really good answer to OldGuys post http://www.sharetrader.co.nz/showthread.php?1088-AIR-NZ&p=618816&viewfull=1#post618816 it illustrates the disparity between the views of those who are trading a share and those who are investing in a company.

Investors, possibly those who stake a claim to FA as their investment bias, if we can lump all of them into one category, are probably less likely to be concerned with the day to day share price movements (despite a few whom frequently post here suggesting otherwise).

Whereas Traders, if we can lump anyone who buys weakness and sells strength into a category, are keen on the day to day share price movements and hopefully nimble enough to take advantage.

AIR provides enough characteristics to be an attractive traders share, it is volatile and offers daily spreads between buyer and seller. On the other hand it seems (was?) an attractive investors company offering sustained profitability, EPS and upside into the future.

You couldn't pick a more bi-polar listed company if you tried to, imho. Best to just be sure about your own investing or trading strategy and try not to be overly influenced by the chatter here. Even the best get their comeuppance, whether traders or investors.

AIR does that, alarmingly regularly.

BAA

The charts tell all, I bought this one,made a paltry 2.84% and got out. Bad timing I guess.

I feel I'm walking a hospital ward here and everyones asleep haha.

[Raz]

You may be right --only time will tell--for me there are a number of things Im not liking in the market as a whole and although AIR may still be fundamentally sound,to many things are pointing in the wrong direction for my liking--It can be @$2 and be fundamentally sound--it aint going broke,but the lofty days may well be over as they are not on easy street anymore imo.
From where im sitting they operate on a strategy of charging premium prices, so we will see if that keeps on working for them in this new environment.
For me ,in this environment a smallish loss and a potential lost opportunity is better than possibly a big loss and the game is never really over--there is always possible opportunities at a much lower price...never know.
My dosh is sitting in my share acc.-yours is sitting in AIR shares--thats the only difference atm.


Their management approach will make clients seriously look at the competition, nickel and dime people long enough and you build resentment. Have heard a great deal about taking the key pref. seats in economy from international flights from koru members this year. Now you have to pay extra for key ones. There are so many examples if you travel on a regular basis. Sometimes they act like they are disney yet without the unique point of difference.

[winner69]

I still haven't got over the movie crapping out about 15 minutes from the end when flying one of those clapped out things from Hong Kong late last year. I assume Rex did die in the Last Taxi to Darwin.

Had fun turning on the overhead light that beamed down on to the poor bugger next to me when he was snoozing

[blockhead]

Left my case in AKL a couple of weeks ago on the way to Buenos Aires, that didn't impress Blocky.

Their "fix the mishap" procedure was good though.

I don't think the AIR sp is doomed, the company is still doing all right and when Virgin is done with normal transmission should resume

[Raz]

Left my case in AKL a couple of weeks ago on the way to Buenos Aires, that didn't impress Blocky.

Their "fix the mishap" procedure was good though.

I don't think the AIR sp is doomed, the company is still doing all right and when Virgin is done with normal transmission should resume


if and only if.......

[Balance]

Some posters here are going to end up with a coronary with AIR - considered one of the best trading (and hence, brokerage churning) stocks by brokers in the market.

[skid]

Left my case in AKL a couple of weeks ago on the way to Buenos Aires, that didn't impress Blocky.

Their "fix the mishap" procedure was good though.

I don't think the AIR sp is doomed, the company is still doing all right and when Virgin is done with normal transmission should resume

i suppose that depends on whether it turns into a long drawn out process.I mentioned what I thought would be best case--I guess worst case would be a long drawn out write off.
They may have to review their pricing strategy to compete if they are not going to provide the things that make an airline premium.
the friendliest stewardess(and stewards) just aint the same when your crammed into a smallish seat and cant get your pen when you drop it.
This could be a storm in a tea cup ,but they are not bulletproof any more .
Their cornerstone was their fabulous earnings and top class management . Now both are in doubt.
Its kind of hard to get an idea now ,of where the SP should be.
We cant really compare to where it was before because the game appears to have changed--Comparing to Quantas is hard now that they have bombed--earnings are forcasted to drop(and may drop further as they price match) and Virgin is a drag on the books.
It doesnt mean they will crash and burn but so far they have been revalued.
A downturn may also affect the golden chalice=dividends

Raz--one thing Ive found is all airlines have gotten much better at retreaving lost luggage now that things have become so computerized--I still take a photo of my luggage before each departure just in case(pardon the pun)

[Raz]

i suppose that depends on whether it turns into a long drawn out process.I mentioned what I thought would be best case--I guess worst case would be a long drawn out write off.
They may have to review their pricing strategy to compete if they are not going to provide the things that make an airline premium.
the friendliest stewardess(and stewards) just aint the same when your crammed into a smallish seat and cant get your pen when you drop it.
This could be a storm in a tea cup ,but they are not bulletproof any more .
Their cornerstone was their fabulous earnings and top class management . Now both are in doubt.
Its kind of hard to get an idea now ,of where the SP should be.
We cant really compare to where it was before because the game appears to have changed--Comparing to Quantas is hard now that they have bombed--earnings are forecasted to drop(and may drop further as they price match) and Virgin is a drag on the books.
It doesn't mean they will crash and burn but so far they have been revalued.
A downturn may also affect the golden chalice=dividends

Raz--one thing Ive found is all airlines have gotten much better at retreaving lost luggage now that things have become so computerized--I still take a photo of my luggage before each departure just in case(pardon the pun)

I will temp fate here..never lost a bag...as an executive was flying international constantly for a F500, averaging 100 flights a year. As a consultant living here and traveling to the US/UK every two-three weeks..never. Think the international air bag system is one of the modern wonders of the world.

Where does this modern urban myth about top class management come from, airlines everywhere have never attracted the best and they constantly miss the 5% MI.
AIR are even used internationally as a case study by consultants as a good company thats misses the 5% MI! Wins some awards by NZ people that want to charm them and cross sell..yeah whatever.

I trade the share as currently the dividend is not adequate rate of return for this shares risk profile IMHO. In addition, what is a return with capital loss, time waits for no one.

[winner69]

I will temp fate here..never lost a bag...as an executive was flying international constantly for a F500, averaging 100 flights a year. As a consultant living here and traveling to the US/UK every two-three weeks..never. Think the international air bag system is one of the modern wonders of the world.

Where does this modern urban myth about top class management come from, airlines everywhere have never attracted the best and they constantly miss the 5% MI.
AIR are even used internationally as a case study by consultants as a good company thats misses the 5% MI! Wins some awards by NZ people that want to charm them and cross sell..yeah whatever.

I trade the share as currently the dividend is not adequate rate of return for this shares risk profile IMHO. In addition, what is a return with capital loss, time waits for no one.


Bit dozzy today - whats this MI you mention Raz

[Zaphod]

Their management approach will make clients seriously look at the competition, nickel and dime people long enough and you build resentment. Have heard a great deal about taking the key pref. seats in economy from international flights from koru members this year. Now you have to pay extra for key ones. There are so many examples if you travel on a regular basis. Sometimes they act like they are disney yet without the unique point of difference.

There are still preferred seats available at no extra cost (including bulkhead) to *G *GE and Koru members, but admittedly *some* seating options now attract an additional fee. Initially this was a very sore point amongst the FF community, however things have settled down. It's no different to what UA, AC, BA etc. have done.

[skid]

Dont know about BA,but Air Canada and United are certainly not gold standard either,thats for sure(Air Canada doesnt even give you a snack on a 6.5hr flight) There are some however that earn the word premium. ..Thai-Singapore Air--even MAL with its mishaps has bigger seats and allows you to chose yourself ahead of time--That gets a big tick in my book

[Tony Two Gloves]

Wow - support just keeps getting smashed! This could get even uglier.......

[winner69]

Friday afternoon often good for AIR share price - might see 250 today

[JohnnyTheHorse]

Friday afternoon often good for AIR share price - might see 250 today

Probably three bucks by next Friday eh?

Can you pass me that Tui?

[kelfy]

I sold all my holding at $3.00 about 3 weeks ago and now I am back to AIR today.

Wish everyone and me good luck. May the force be with AIR.

[Beagle]

Plenty of weak holders to shake out yet, good things take time aye, patience not panic required.

Good post mate, nothing much else needs to be said at present IMO.

[skid]

Friday afternoon often good for AIR share price - might see 250 today

The goal was $3 a few weeks ago --crazy world eh?

[skid]

Plenty of weak holders to shake out yet, good things take time aye, patience not panic required. PS-Mickey im down 11%on Air and 16% NZR so your not alone.

With all due respect, a little panic back at $2.70 would have been handy.

[Raz]

With all due respect, a little panic back at $2.70 would have been handy.

Its all good, the holders aid the traders:-)

[percy]

The share price has gone down below the 499 EMA.
Next support level $2.20.?

[Raz]

The share price has gone down below the 499 EMA.
Next support level $2.20.?

hmm not sure about that..looking nasty

[Baa_Baa]

The share price has gone down below the 499 EMA.
Next support level $2.20.?

See if $2.35 support from Jun and Sept 2015 (double bottom) holds.

[skid]

The share price has gone down below the 499 EMA.
Next support level $2.20.?

Interesting, I noticed Hoops target price (on the TA thread) was 2.19 (pretty close) I wish i had followed that thread more carefully(or even noticed it )before my $600 education..Cest la vie.

[sb9]

I trade the share as currently the dividend is not adequate rate of return for this shares risk profile IMHO. In addition, what is a return with capital loss, time waits for no one.

Exactly my thoughts too as I posted few days back, div yield may be good but it counts for nothing when your capital investment depreciates further than yield.

[Raz]

Interesting, I noticed Hoops target price (on the TA thread) was 2.19 (pretty close) I wish i had followed that thread more carefully(or even noticed it )before my $600 education..Cest la vie.

No one wins them all mate, and TA does not work every time. Its all about winning one more fortune than you lose, just as in life.

[sb9]

Seems as though AIR and SKT monies are flowing onto more safer stocks like the Gentailers going by trading pattern today...

[winner69]

From a long term cyclical perspective the next support is somewhere between 100 and 150 (depending on how much AIR is cycling upwards) - see yesterdays chart

[winner69]

Must have a lot more said at that investor day than what was written in the presentation - even playing field?

[babymonster]

52 week low was 2.35.. hope fully it can hold it around that, now it's 2.34

[winner69]

Since Jan 3 2015 the AIR share price has averaged $2.74 with a Standard deviation of 17 cents

There have been only 4 days when AIR has closed +/- 2 Stdev. They were the extreme highs over 308 in Jan this year and the odd days it has fallen below 240

Today is another one of those days

Some might say today is just an outlier (on the last 16 months performance) in the life of a boring stock that brokers love see being churned ...so no worries

[winner69]

...and on Monday the papers will be reporting 'AIR price up sharply as bargain hunters returned" to the market

[biker]

Since Jan 3 2015 the AIR share price has averaged $2.74 with a Standard deviation of 17 cents

There have been only 4 days when AIR has closed +/- 2 Stdev. They were the extreme highs over 308 in Jan this year and the odd days it has fallen below 240


Today is another one of those days

Some might say today is just an outlier (on the last 16 months performance) in the life of a boring stock that brokers love see being churned ...so no worries

Nicely put Winner69

[babymonster]

might be large holders are offloading... quite a few 200k plus shares were traded around 2.35 level....

[sb9]

sold my Ohe and topped up air

Any regrets looking at both of them today, not being cynical...

[skid]

...and on Monday the papers will be reporting 'AIR price up sharply as bargain hunters returned" to the market

You may be right ,but there has been a short term pattern of a big drop mid day and then it slowly builds(a bit) only to take a dive the next day---atm its lower highs and lower lows. also pretty big volume--Ive also noticed big trades at the end of the day--We are still getting some 100,000 and 50,000s but i havent seen any management selling notices yesterday or today---dont know if thats good or bad

[axe]

8021
Any regrets looking at both of them today, not being cynical...

# noragrets

[OldGuy]

Any regrets looking at both of them today, not being cynical...

wow, talk about passive-aggressive.

[babymonster]

Any regrets looking at both of them today, not being cynical...

always a bit, but you can't really pick the top just like you can't pick the bottom... i will wait for ohe report out and consider re-enter, less familiar with their report history...

[sb9]

wow, talk about passive-aggressive.

Was myself in those kind of situation more than once.

[OldGuy]

ergo, rub it in?

Yeah nah.

[blackcap]

FWIW, just flew the 787 from Shanghai to Auckland and the experience was great. Flew the same plane to Tokio a month ago and again cannot say how good these new planes are. Also flew KLM from Amsterdam to Shanghai in a clapped out 747-400 and well the difference is just breathtaking...
Both planes were full, so that does bode well for AIRNZ.

[workingdad]

I know I'm going against the grain here but I bought some more today. Nothing major but quite simply I think it's oversold.

[Bobdn]

Workingdad, are you still up to your nuts in CEN? I hope so. CEN has been dulling my AIR pain over the last few days.

[workingdad]

Workingdad, are you still up to your nuts in CEN? I hope so, it's been dulling my AIR pain over the last few days.

No, sold out when it hit $5 and really happy with how it played out, I haven't got as much tied up in AIR as I did in CEN - been more cautious due to some concern on international factors and exposure to global economics.

Playing a similar strategy to CEN though. Yes AIR has some headwind but if the VAH thing works out to be neutral or even favourable there is the opportunity for some good gains. My average is higher than I want it to be in the $2.50's range and if it gets back to that I will consider dumping them all depending on any information at the time. Just trying to calculate a stop loss at present - maybe $2.20.

ASB securities has been down the majority of the day but from what I could see there is some pretty strong resistance in the mid $2.35s with significant volume traded since then which I know can be broken but fundamentally at this price it seems worth a bit of a roll of the dice. Time will tell if its the right call but its been a good year but as you say - being nuts deep in CEN has given a margin of error.

[couta1]

I know I'm going against the grain here but I bought some more today. Nothing major but quite simply I think it's oversold. Your last sentence would be the understatement of the year.:cool:

[workingdad]

Your last sentence would be the understatement of the year.:cool:

Yeah but is there more to come is the million dollar question :confused:

[couta1]

Yeah but is there more to come is the million dollar question :confused: Let the herd continue to jump of the cliff but as you know all herds eventually run out of numbers, and then...

[workingdad]

Let the herd continue to jump of the cliff but as you know all herds eventually run out of numbers, and then...

Or is it a flock lol :p

[couta1]

Or is it a flock lol :p Kinda a bipolar mix really of followers and cliff jumpers.

[Baa_Baa]

Let the herd continue to jump of the cliff but as you know all herds eventually run out of numbers, and then...

Couts, you mixing your metaphors .. do you mean:

- a slice of lemmings
- a herd of bulls
or perhaps
- a flock of sheeple

Lol. Eventually you will be right, with AIR.
;)

[couta1]

Couts, you mixing your metaphors .. do you mean:

- a slice of lemmings
- a herd of bulls
or perhaps
- a flock of sheeple

Lol. Eventually you will be right, with AIR.
;) I've confused myself now, have a good weekend. PS-Im not bothering looking at my portfolio total tonight due to the fear of being chased by a very large red Indian firing equally large red arrows my way.:cool:

[Beagle]

http://www.sharechat.co.nz/article/4f3bf394/air-nz-sale-of-virgin-stake-could-be-delayed-by-australian-election.html

[workingdad]

I've confused myself now, have a good weekend. PS-Im not bothering looking at my portfolio total tonight due to the fear of being chased by a very large red Indian firing equally large red arrows my way.:cool:

I find this always helps

https://www.youtube.com/watch?v=tqv5iEUY7QQ

[Vaygor1]

Couts, you mixing your metaphors .. do you mean:

- a slice of lemmings
- a herd of bulls
or perhaps
- a flock of sheeple

Lol. Eventually you will be right, with AIR.
;)
Yep.... the cows will come home to roost.

[Joshuatree]

One thing for sure :cool:couta:cool: is so consistent that if one does the opposite ones share values will soar.:cool::cool::cool:

[Master98]

4 traders lower its average target price from $3.2 to $2.8, so more likely institution investors are dumping AIR shares, but current price is so attractive to me, bought more at today close, now really overweight.

[couta1]

One thing for sure :cool:couta:cool: is so consistent that if one does the opposite ones share values will soar.:cool::cool::cool: It's a shame we still have veiled personal attacks on this forum.

[Joshuatree]

Hailstorm of falling knives, cutthroat razors,machetes, full throttle Husqvarnas. Good luck juggling them armless:t_up: Or one could wait until the trend makes a convincing break back up and pile in with way less risk and managing risk is what investing is all about whereas you could take the gambling buy a lotto ticket way as "you've got to be in to win" AAAY

[Joshuatree]

no veil you are consistent

[skid]

http://www.sharechat.co.nz/article/4f3bf394/air-nz-sale-of-virgin-stake-could-be-delayed-by-australian-election.html

You think the virgin thing is bad,did you see the world debt meter in the upper left corner of the page!
Im surprised in a way that AIR has put a date it wants the deal done by--I would have thought that would weaken the bargaining position for selling,but maybe in other ways finalizing (sort of)might help.

W Dad,I was in the same mind as you when I bought--but it kept dropping--obviously at some point it will become oversold, but when is just a guess(no matter how many animals and cliffs are involved) the only thing we can say at this point is that those who used that line of thought (we both have used) but @ 2.70 came horribly unstuck so that doesnt really give much authority to speak in absolutes.
Of course no one knows for sure how this will play,but it will be interesting to see if those who called it, are right in their advice for re entry---theres a bit in the TA thread.

For those solely in to FA then there are a number of things to consider before trashing the revaluation----Oil is up--Kiwi dollar is up -alot of other airlines are down--Virgin--AIR earnings downgrade(why is there an earnings downgrade for 2017?)

On the other hand,even if we are throwing darts--Im sure someone will pick the bottom.

[Baa_Baa]

On a slightly positive note, today's going to look pretty encouraging on the daily chart, as the price dropped to support $2.35, probed lower but recovered just above support. That suggests a decent support test and buyers recovered the day. Probably doesn't mean much in the whole scheme of things, but it will be a somewhat encouraging candle on the daily chart for those looking for a bottom.

Don't take this as advice to buy Monday! I'm just trying to cheer things up a bit.
:)

[freddagg]

4 traders lower its average target price from $3.2 to $2.8, so more likely institution investors are dumping AIR shares, but current price is so attractive to me, bought more at today close, now really overweight.

I see Milford has sold a lot of AIR in April

[workingdad]

Hailstorm of falling knives, cutthroat razors,machetes, full throttle Husqvarnas. Good luck juggling them armless:t_up: Or one could wait until the trend makes a convincing break back up and pile in with way less risk and managing risk is what investing is all about whereas you could take the gambling buy a lotto ticket way as "you've got to be in to win" AAAY

I'm curious as to how many days and what increase would be required for you to consider it convincing? Perhaps you could say when that is. When it happens bearing in mind there is a limit of any convincing increase as it finds a new. Trading range (without a good announcement) how much gain would be left?

I'm not disagreeing it's not without risk buying in today and leveraging down but there's no guarantees on any share purchase and as handy charts are they are a part of any consideration not the only consideration.

I've put it out there. My average and what I have done with AIR over the last 6 months. This episode I'm down and it's the first time in 3 years with AIR having bought and sold more times I can count. Two solid days and I'm back to break even point. Two bad days and I will be soaking up a decent loss. We have all had ups and downs. I'm frustrated with the irrational overreacting market behavior on a number of shares of late and even with AIR not being able to keep up record profits looking ahead it's got a solid performance and outlook with pretty decent management worth putting faith in. I don't agree with all they do but generally speaking I'm a believer and think VAH will not end up being a worst case scenario outcome.

[workingdad]

You think the virgin thing is bad,did you see the world debt meter in the upper left corner of the page!
Im surprised in a way that AIR has put a date it wants the deal done by--I would have thought that would weaken the bargaining position for selling,but maybe in other ways finalizing (sort of)might help.

W Dad,I was in the same mind as you when I bought--but it kept dropping--obviously at some point it will become oversold, but when is just a guess(no matter how many animals and cliffs are involved) the only thing we can say at this point is that those who used that line of thought (we both have used) but @ 2.70 came horribly unstuck so that doesnt really give much authority to speak in absolutes.
Of course no one knows for sure how this will play,but it will be interesting to see if those who called it, are right in their advice for re entry---theres a bit in the TA thread.

For those solely in to FA then there are a number of things to consider before trashing the revaluation----Oil is up--Kiwi dollar is up -alot of other airlines are down--Virgin--AIR earnings downgrade(why is there an earnings downgrade for 2017?)

On the other hand,even if we are throwing darts--Im sure someone will pick the bottom.

Hi Skid. Maybe they are putting a date on it with the knowledge they have some discussions going on in the background already or maybe they are just trying to avoid it being included in profit/loss for the full year results?

Calling it right will be a bit of luck as far as I can tell but even though ASB securities was down most of the day it seemed to me 4 million odd shares changed hands in that resistance level zone so I see that as a possible indicator and hopefully that results in a better week next week.

I agree, oil, kiwi dollar, VAH earnings, all negatives not to mention increased competition but on the positive, great first half results, solid operation updates since, NZ tourism growing exponentially. Last operational update showed good growth with us kiwis traveling overseas as well and with all our real estate being worth so much and borrowing against it for things like travel I cant see it suddenly coming to an end.

AIR has maximum hedge for the oil side of things and who knows if the oil prices keep rising where supply is abundant.

I had everything cashed up a month ago and bought some AIR in the lull without a stop loss in place and down she came - do a regret it, well yes in honestly I do but with it being at the price it is now I think it's worth a crack, I will have to eat my words if it doesn't rebound but none of us are right all the time, my wife reminds me of that most days ;)

[Joshuatree]

Hopefully you're near a capitulation. I try and follow KW's simple advice re watching volume MACD and M/A.s; moving averages 60 day and 200days and lesser like 30DMA. The s/p chart going down through those M/A is a warning followed y a get out. and the reverse for buying;i keep it simple. There is a lot of advice on here about that and much more savvy stuff from kW, HOOP, BaaBaa etc. Trying to buy at the bottom or just guessing is not managing risk but speculating.

The other thing we all have to keep reminding ourselves is that newbies, naive folks are easily influenced by posts from folks making authoritative i know what I'm doing:cool: posts do what i do.. Opinions becoming Guru Advice where the poster starts behaving like a licensed qualified adviser and guiding folks to losing money is unacceptable and we all need to take responsibility for what we say and how we say it. I know i get excited and carried away on my tiny spekkys but i try and spell out the risks involved and to keep allocations there tiny/small.

[workingdad]

Hopefully you're near a capitulation. I try and follow KW's simple advice re watching volume MACD and M/A.s; moving averages 60 day and 200days and lesser like 30DMA. The s/p chart going down through those M/A is a warning followed y a get out. and the reverse for buying;i keep it simple. There is a lot of advice on here about that and much more savvy stuff from kW, HOOP, BaaBaa etc. Trying to buy at the bottom or just guessing is not managing risk but speculating.

The other thing we all have to keep reminding ourselves is that newbies, naive folks are easily influenced by posts from folks making authoritative i know what I'm doing:cool: posts do what i do.. Opinions becoming Guru Advice where the poster starts behaving like a licensed qualified adviser and guiding folks to losing money is unacceptable and we all need to take responsibility for what we say and how we say it. I know i get excited and carried away on my tiny spekkys but i try and spell out the risks involved and to keep allocations there tiny/small.

Selling stock at its lowest point in a year makes less sense to me than trying to buy at the bottom. I wont argue there's no risk and I haven't tried to hide that.

Reading the posts of 134 under my name I doubt anyone will confuse my advice as being authoritative. Like I said, it will either go up or down, with over 6 million shares traded today there stands to be a lot of winners and losers and obviously buyers and sellers are on opposite sides of the fence each with their own rationale behind the decision to either buy or sell. I have mine and one way or another will have some idea in a week or two if it was the right move to make.

[Joshuatree]

Sorry that 2nd paragraph is a reminder for everyone, not aimed at you. Good luck.

[workingdad]

Sorry that 2nd paragraph is a reminder for everyone, not aimed at you. Good luck.

Thank you JT - might just need it :cool:

[James108]

Hopefully you're near a capitulation. I try and follow KW's simple advice re watching volume MACD and M/A.s; moving averages 60 day and 200days and lesser like 30DMA. The s/p chart going down through those M/A is a warning followed y a get out. and the reverse for buying;i keep it simple. There is a lot of advice on here about that and much more savvy stuff from kW, HOOP, BaaBaa etc. Trying to buy at the bottom or just guessing is not managing risk but speculating.

I would say buying based on moving averages, MACDs or whatever else is speculating. You say that trying to buy at the bottom is speculating but isn't that what you are trying to do? Albeit with some delay while you wait for your magic lines to cross.

I believe Share Price and value should be the primary considerations for an investor. Not that I believe the likes of Couta have a sufficient understanding of AIR to make an investment decision, emotion/hype seems to rule.

[Baa_Baa]

Here is a chart and a fairly simple technique that might help some people find the buys and sells of a strongly trending share. It works most of the time, but not all of the time. You can see the horizontal support line and the 4-year rising trend line converging right where the SP tested and closed slightly above today. Some use this as a looking glass into what might happen, and today it did happen almost like text book.

It is weekly chart so a lot of the daily noise is ignored. Basically, we look for the weekly price to ... 1. cross and close above or below both the 10 and 14 day EMA's (exponential moving average) - the green and red wavy lines on this chart. 2. confirm the direction in the first day of the next week by staying above or below the same EMA's. Over the past 4 years, AIR has but for one period in mid 2014 been volatile enough for this very simple trading strategy to work out just fine. At present AIR is a sell, or was a sell around $2.80.

The green arrows on the chart are buys and the red arrows are sells, there are only 10 trades (buys or sells) indicated here in the past 4 years. This might not be the right strategy for you, but it works fairly well most of the time for strongly trending shares. The TA guru's will of course suggest that you have a bunch of indicators (mathematically calculated points that help to confirm the price direction) to help confirm these decisions to buy or sell. But I'm not going into that level of detail now.

See what you think of this very simple trading strategy for strongly trending shares. (yes PT I know its an arithmetic scale). It seems some people might appreciate how some very simple TA can work to help make decisions on being in, or out of volatile shares.

8024

Cheers
BAA

ps: not advice, never is or will be, one should always dyodd. Just sharing some thoughts, I hope it helps.

[Xerof]

JoshuaT mentioned capitulation.
Yes, capitulation is what we look for to signal a (n interim maybe) turning point. Look for a chart pattern like this one on the right:
8022

the left hand candle is the bears in control, followed the next session by a further attempt to push it lower, and/or those who give up in panic or frustration, but which is met by strong buying, closing above the open (good volume is nice to have on this candle too)

Too many people then think the next day is the buy day, but its never confirmed until the end of the day with the Right hand side bullish candle.

Buy with confidence on day 4, as the bulls have their tails up

On 28 April, I posted a 'measured' target of 2.15 from another TA structure, with interim support at 2.35 and 2.25, both being old support/older resistance levels from some time ago.

No evidence of a bottom yet IMO, but as Baa says, we held the first line of chart support today, albeit unconvincingly.

no axe to grind - take it or leave it - I don't hold AIR

the formation on the left is the opposite, for picking tops with equal confidence.

[couta1]

I would say buying based on moving averages, MACDs or whatever else is speculating. You say that trying to buy at the bottom is speculating but isn't that what you are trying to do? Albeit with some delay while you wait for your magic lines to cross.

I believe Share Price and value should be the primary considerations for an investor. Not that I believe the likes of Couta have a sufficient understanding of AIR to make an investment decision, emotion/hype seems to rule. Sometimes I wonder why I bother with the forum when you get posts like this, emotion and hype don't control my decisions,I stand firm on what I decide and are not swayed by anyone once I've made my decision. As I've said before I've never lost money on Air and won't this time either. So the likes of Couta may actually understand more about Air than you think.

[James108]

Sometimes I wonder why I bother with the forum when you get posts like this, emotion and hype don't control my decisions,I stand firm on what I decide and are not swayed by anyone once I've made my decision. As I've said before I've never lost money on Air and won't this time either. So the likes of Couta may actually understand more about Air than you think.

The way you post gives me the impression you care a great deal about the day to day share price movements. Talk of things falling off cliffs, sheeple etc etc.

I would be interested in what you think AIRs future cash flows will be and where you think the intrinsic value of AIR sits.

[workingdad]

Sometimes I wonder why I bother with the forum when you get posts like this, emotion and hype don't control my decisions,I stand firm on what I decide and are not swayed by anyone once I've made my decision. As I've said before I've never lost money on Air and won't this time either. So the likes of Couta may actually understand more about Air than you think.

Because a lot of us appreciate what you have to add Couta1.

I don't see the need for negative comments like that either. Everyone is entitled to an opinion and no one will be right 100% of the time other than of course my wife who's right even when she isn't if you know what I mean.

Thanks for the time taken on the charts Baa Baa and Xerof. I have played with them on a very basic level but just found they were right as much as they were wrong other than looking backwards that is. I would like to learn more about them as I see benefit in this - if enough people use and interpret charts to indicate the same buy and sell points then the share price will move with them I guess - or is that a bit of a simplistic view?

I would be lying if I said I hadn't taken on board some of the analysis people do on here and used it as part of a consideration with making a decision but at times I find myself going against the grain based on what I perceive to be correct as is the case with AIR it would seem. I don't have the experience to confidently say I am right and neither does my crystal ball but I'm in and will try not to get emotive throughout the ride :eek2:

For me its pretty simple with AIR, they move people through the air from point a to point b, looking back historically oil is cheap, the dollar is in a reasonable range even if both are not to the extreme they were 2 months ago, they have a fleet that wont have expensive future costs to run in comparison to others and tourism is at an all time high and growing which put simply is their core business.

Am I so wrong in saying fair value is more than $2.36?

[BIRMANBOY]

Making judgemental comments about other investors level of understanding is probably ill-advised and does you no favours. Regardless of whether one "understands" a share or not, the market can and does react counter to how it "should" so a smart investor recognises that frequently s**t happens even when we know every last detail on the annual report. Also making blanket appraisals based on what you read in a forum is sort of like picking icebergs..you only see a portion of the whole thing so have no real base to make decisions on. Lastly I happen to know that Couta has had some very big wins but he's a modest guy and wouldn't have made a big fuss about that.
I would say buying based on moving averages, MACDs or whatever else is speculating. You say that trying to buy at the bottom is speculating but isn't that what you are trying to do? Albeit with some delay while you wait for your magic lines to cross.

I believe Share Price and value should be the primary considerations for an investor. Not that I believe the likes of Couta have a sufficient understanding of AIR to make an investment decision, emotion/hype seems to rule.

[Baa_Baa]

[snip] Thanks for the time taken on the charts Baa Baa and Xerof. I have played with them on a very basic level but just found they were right as much as they were wrong other than looking backwards that is. I would like to learn more about them as I see benefit in this - if enough people use and interpret charts to indicate the same buy and sell points then the share price will move with them I guess - or is that a bit of a simplistic view?
[end snip]

Don't worry about what other people think or do, just follow your strategy. If that involves being informed by a chart, or some other technique for deciding buys and sells, don't worry about whether everyone else sees it and may or may not act on it. Just do it, just trade your strategy. Herd mentality is your friend, the charts just help you to identify and predict that, and make your own decisions.

Good luck.
BAA

[percy]

Hello, hello ,hello,
Was that Chris Luxon in "The Running Man Challenge" wearing a waistcoat?

[OldGuy]

I would say buying based on moving averages, MACDs or whatever else is speculating. You say that trying to buy at the bottom is speculating but isn't that what you are trying to do? Albeit with some delay while you wait for your magic lines to cross.

I believe Share Price and value should be the primary considerations for an investor. Not that I believe the likes of Couta have a sufficient understanding of AIR to make an investment decision, emotion/hype seems to rule.

This was a good post up until the last sentence, at which point it immediately became very sour. Try better next time, please.

Couta, like me, is not afraid to post his losses in order to aid others' learning. Sure, we've made some big wins too, but we both believe that there is more to learn from other peoples' mistakes and are happy for others to learn from ours.

Shame that people like you interpret that as an opportunity to take a swipe.

[winner69]

This was a good post up until the last sentence, at which point it immediately became very sour. Try better next time, please.

Couta, like me, is not afraid to post his losses in order to aid others' learning. Sure, we've made some big wins too, but we both believe that there is more to learn from other peoples' mistakes and are happy for others to learn from ours.

Shame that people like you interpret that as an opportunity to take a swipe.

Well put and agree

A couple of posters should reflect on some of the stuff they posted last night

[winner69]

I think Air NZ will still be flying passengers around the world in 10 years time and making money doing it

Wonder what share price will be in 10 years time?

[777]

i think air nz will still be flying passengers around the world in 10 years time and making money doing it

wonder what share price will be in 10 years time?

60rmb. +/-1

[percy]

60rmb. +/-1

Classic......lol.

[skid]

Hi Skid. Maybe they are putting a date on it with the knowledge they have some discussions going on in the background already or maybe they are just trying to avoid it being included in profit/loss for the full year results?

Calling it right will be a bit of luck as far as I can tell but even though ASB securities was down most of the day it seemed to me 4 million odd shares changed hands in that resistance level zone so I see that as a possible indicator and hopefully that results in a better week next week.

I agree, oil, kiwi dollar, VAH earnings, all negatives not to mention increased competition but on the positive, great first half results, solid operation updates since, NZ tourism growing exponentially. Last operational update showed good growth with us kiwis traveling overseas as well and with all our real estate being worth so much and borrowing against it for things like travel I cant see it suddenly coming to an end.

AIR has maximum hedge for the oil side of things and who knows if the oil prices keep rising where supply is abundant.

I had everything cashed up a month ago and bought some AIR in the lull without a stop loss in place and down she came - do a regret it, well yes in honestly I do but with it being at the price it is now I think it's worth a crack, I will have to eat my words if it doesn't rebound but none of us are right all the time, my wife reminds me of that most days ;)

We are in a very similar mindset WD the only difference is that with the one share we took a punt in I got out,but that still allows getting back at a lower price (If I bought back in at a drop of X amount,id be even, -whether I would do that is another thing) so in a way its speculating without being in the Share--like gambling with lost opportunity.
I think in answer to your earlier question about when is it convincing the TA folks would say (to put it simply,when it reverses from lower highs and lower lows---to higher highs and higher lows.)
Aside from the day it raced up ,its been following a pretty similar pattern with Friday no exception.
The main reason I departed is that A-I deveated from basic strategy,and tried my luck and B-this share is such a firecracker that Id rather gamble with lost opportunity than capital or if I took my own advice -not gamble at all--depends on whether I turn out to be a slow learner:)

[winner69]

60rmb. +/-1

Worth holding then

[Beagle]

Well put and agree

A couple of posters should reflect on some of the stuff they posted last night


I think Air NZ will still be flying passengers around the world in 10 years time and making money doing it

Wonder what share price will be in 10 years time?

Agree 100%. Some need to ask themselves why they think its there place to comment on or critique the ability of other posters.

Some perspective for holders - There's always sunshine after rain. Obviously while uncertainty hangs over AIR regarding the Australian gorilla on their back its going to be tough to gain altitude. I think the market has basically written off the value of their VAH stake so any reasonable solution could see a meaningful bounce.

You made a really good post a while back Winner wherein you asked when the SP was $3.00 is this as good as it get's and risks to the downside appear greater than the upside. Let me return the favour, is this close to as bad as it gets, risks to the upside now significantly outweighing the risks to the downside ?

I see consensus forecast dividends for the foreseeable future have barely changed so for the many people who bough as a long term investment, what's really changed ? I think we all knew in our hearts FY17 was going to be a little less than FY16 as the full year's effect of new competition set in. Consensus analyst forecast for FY17 is $758m before tax down from $839m this year. Hardly falling off the edge of a cliff is it !

I absolutely agree with AIR's management in terms of their strategic direction of getting out of VAH, (might take them longer than they'd like but who's to say one way or the other whether a deal isn't imminent ?), and perhaps even more importantly growing capacity in a disciplined manner in line with the tourism growth rate. It appears regional demand within N.Z. is in better shape than Australia and the relative tourism growth rates need to be considered in the bigger picture too. Australia 8% and N.Z. 10%. Record migration to N.Z. is another strong macro economic factor as new residents travel and their friends and extended family come to visit. Their way of expanding using revenue sharing methodology and getting other partners to invest because they have skin in the game is well thought out too IMO.

[skid]

60rmb. +/-1

You forgot to apply the statistical standard deviation of .9901x-b9(2-X6)--upon working this out you would have come to the realization that air NZ does not indeed fly passengers around the world,they have to use code share partners:)

[777]

You forgot to apply the statistical standard deviation of .9901x-b9(2-X6)--upon working this out you would have come to the realization that air NZ does not indeed fly passengers around the world,they have to use code share partners:)


I thought that was covered by the +/-1 which I had to add to meet the minimum letters required to actually post. My bad.

[skid]

Because a lot of us appreciate what you have to add Couta1.

I don't see the need for negative comments like that either. Everyone is entitled to an opinion and no one will be right 100% of the time other than of course my wife who's right even when she isn't if you know what I mean.

Thanks for the time taken on the charts Baa Baa and Xerof. I have played with them on a very basic level but just found they were right as much as they were wrong other than looking backwards that is. I would like to learn more about them as I see benefit in this - if enough people use and interpret charts to indicate the same buy and sell points then the share price will move with them I guess - or is that a bit of a simplistic view?

I would be lying if I said I hadn't taken on board some of the analysis people do on here and used it as part of a consideration with making a decision but at times I find myself going against the grain based on what I perceive to be correct as is the case with AIR it would seem. I don't have the experience to confidently say I am right and neither does my crystal ball but I'm in and will try not to get emotive throughout the ride :eek2:

For me its pretty simple with AIR, they move people through the air from point a to point b, looking back historically oil is cheap, the dollar is in a reasonable range even if both are not to the extreme they were 2 months ago, they have a fleet that wont have expensive future costs to run in comparison to others and tourism is at an all time high and growing which put simply is their core business.

Am I so wrong in saying fair value is more than $2.36?

No, your not so wrong,nor is it wrong to say its fair value is less--lets face it ..the jurys out-(and even if the fair value is more or less,the SP could do just the opposite --I think the main point is that we dont know at this stage---There fore we should be taking alot of things with a grain of salt.
My example of possible problems was certainly not a definite prediction in any form--it was just to add to the mix(It was really in response to the 'sheeple'' comments which imply that those that are selling are idiots.(ok,most agree some responses were a bit much,but i think it may have come from the fact that such absolute statements were coming from those who were losing atm,ok..on paper) ..point is ,we just dont know--it even appears to be a close one for the TA ers.

RE Couts--Hes had some wins and the consistant remark is, I believe not correct as (if memory serves)he had sold out of AIR when it was above $3 and bought back in at a lower price--that worked a treat for those who did that the 2-3 times before, when it then bounced--just got caught this time (as did many) --credit has to be given to Hoop who did warn against the damage if it broke the resistance this time around (3rd try?)of 2.70

[thestg]

I have now held my AIR shares for 7 months. Done a stop-loss sell off last November but bought back in a week later at a loss.

I also borrowed more on my mortgage to try to catch a falling knife over the last weeks.
I bought equal amounts between $2.78 & $2.47, being an average price of $2.64.

My average cost for all my AIR shares now is $2.55 per share. My portfolio is vastly over weighted at 46.25% in AIR.
The last dividend pay-out covered my interest repayments for 12 months (up till October 2016).

My capital has eroded by about 7.4% at Fridays close price, but will be back to 0% when/if the price returns to $2.55

I now know the pressure of ignoring my stop loss a couple of weeks ago, but am not going to sell now!

My object is to hang in there till 2020 as planned, but will sell down 50% when/if the price returns to over $2.80 (50% is what I bought over the last few weeks when I got greedy).

[percy]

A quote from John Maynard Keynes;
"The market can stay irrational a lot longer than you can stay solvent."

[winner69]

A quote from John Maynard Keynes;
"The market can stay irrational a lot longer than you can stay solvent."

A variant if that is - "The road to the poor house is paved with undervalued stocks that should have gone higher"

[Bobdn]

Roger, thanks for your post just above about consensus dividend forecasts, helps keep things in perspective.

[percy]

A variant if that is - "The road to the poor house is paved with undervalued stocks that should have gone higher"

What a wonderful quote.
Unfortunately I have travelled down that road far too often.!! ..lol.

[winner69]

roger -
You made a really good post a while back Winner wherein you asked when the SP was $3.00 is this as good as it get's and risks to the downside appear greater than the upside. Let me return the favour, is this close to as bad as it gets, risks to the upside now significantly outweighing the risks to the downside ?

Agree

Over last 16 months or so the AIR share price has averaged $2.75. Not far away from current censesus - spooky

It has also cycled between 240 odd and 300 odd - so will probably cycle its way back to 300 plus from here

The financial fundamentals, ie expected divdends, are strong (sone here would say compelling) at 240


So simple TA and simpe FA both say 300 in the the next month or two

Heck, thats a 25% plus gain

I'm in

(Hard to believe price down nearly 30% in few monhs - thats BEAR territory)

[Raz]

Agree

Over last 16 months or so the AIR share price has averaged $2.75. Not far away from current censesus - spooky

It has also cycled between 240 odd and 300 odd - so will probably cycle its way back to 300 plus from here

The financial fundamentals, ie expected divdends, are strong (sone here would say compelling) at 240


So simple TA and simpe FA both say 300 in the the next month or two

Heck, thats a 25% plus gain

I'm in

(Hard to believe price down nearly 30% in few monhs - thats BEAR territory)

Well said, if you are happy with a little anxiety, trade or invest, you can make this share work for you. IMHO the VAH outcome personally will decide if it can get back to $3 in the short term and when. Also have to consider it has be rerated by the market. I think there are a lot of traders in this share and you have to go into it realising that and it will have an effect on the SP movements. I have been trading it for 12 months and have done rather well. Only paid some money back on this last swing. I am just one small trader of many, the shares I have held have varied from 35,000 to 350,000 at any one time. Magnify that across the market and you can see why these price swings can occur base on average daily volumes.

[sl234]

Hi newbie here with what I think is a golden nug.
Alotta experts here are discussing AIR purely on the basis of 200 MA or TA. Obviously this is a huge downturn and below a couple standard deviations, and normally this would be a get out scenario.

But does noone here read current events?

Asian immigration is a CONTINUING trend, and is reflected in AIR's share price growing 82% in the last three years, cheaper oil prices which look to be here for a year at least.
4% increase in visitor numbers every year, and looking at the recent trend in Auckland house prices, they aren't pinching pennies when it comes to expenditure.
If anything AIR's status as a premium airline that its setting is more fitting towards a growing asian middle class as more and more Chinese flock to NZ.

Think about sectors and trends, VAH may serve as an offset now but I cannot see AIR falling on its own sword in the middle of such a prosperous time period.
Personally I doubled down when I saw they had dipped to 2.35.
Baa Baa you don't seem to place much emphasis on this at all and I don't understand why you could leave such a hole in your analysis after you have had so much experience trading.

[Baa_Baa]

Looking at the 10 year monthly price chart, those spooky fibonacci lines show Friday's touchdown and closing prices as bang on the 38.2% fib retrace of the entire 4-year bull trend. Interesting also the $1.75 low of Oct'14 is bang on the 61.8% fib retrace, so plenty of 'air' under here if negative sentiment continues to weight on the SP.

One other thing, notice the 10 month MA crossing down through the 20 month MA = the double death cross. Last times these long moving averages crossed down in the past 10 years was Feb 2008 and Mar 2011. They don't fire off signals very often, so when they do it's best imho to take notice.

8025
10 year Monthly chart arithmetic scale. 4-year bull trend being tested now.

8026
10 year Monthly chart log scale. 4-year bull trend break-down.

BAA

[Baa_Baa]

[snip]
Baa Baa you don't seem to place much emphasis on this at all and I don't understand why you could leave such a hole in your analysis after you have had so much experience trading.

Hi sl234 welcome to shareTrader.

Fundamentals are thoroughly discussed here, I think that FA is an absolutely essential factor in deciding whether a company is a sound investment proposition. Assuming it is, then I buy or sell all or some of my holding based solely on the share price at the time. I actively manage my capital using the charts.

This you may perceive as a "hole in your [my] analysis" but I just don't talk about fundamentals here with so many much more clever and thorough contributors. As an aside, my trades are infrequent as I prefer the weekly charts and monthly charts over daily which I only use to confirm.

cheers
BAA

[Beagle]

sl234 - Welcome to the forum. I've made dozens of posts about the strong fundamentals' of AIR so You're preaching to the converted as far as I'm concerned.
To my way of thinking AIR is presently charged with negative emotion, almost a perfect storm of discontent with management selling with apparent inside knowledge, the well discussed VAH fiasco and now the profit downgrade for FY17. Add in a healthy dose of fear because of the speed of the correction and the uncertainty of with a sale in VAH may or may not eventuate and you'd struggle to find a better script to write in terms of generating a strong downward correction. Often one finds the best opportunities when fear and uncertainty abound. PE based on Friday's closing price is only 4.2, lowest its ever been and the FY17 downgrade wasn't that bad. Not to be considered a recommendation but I'm looking at doubling down as soon as I am sure its bottomed out.

Welcome back on board Winner69, please keep your tray table folded away and seat belt firmly fastened and enjoy the ride :)

[skid]

Sl234--I suppose if you wanted to do a bit of research you could go back and see just what and how much fundamentals have changed since 2012 and then decide if they are over 250% better. (thats where we are now)

Roger-thats what we all want to know---(sure its bottomed out)

[winner69]

Hey Roger - even though Raz and others already know these tricks you might find interesting when looking fe that cheap fare to vegas

[Baa_Baa]

Management are very fortunate that the SP has tracked north since the VAH announcement on Monday and the investor day presentation on Tuesday. Knowing how the FMA and NZX work this gives them a very convenient defence against any suggestion that the actual release of that information was price sensitive in a negative way. Having invested a huge amount of time in the SUM matter and hundreds of hours working with the Securities Commission on a finance company matter in years gone by I believe this convenient SP bounce would render any further enquiries on this matter as ineffective. I believe you good folks already know my view on the morality of this matter though...Greed, self interest and human nature are seldom pretty things to watch as they play themselves out...over and out from me on that matter.
[snip]

Given that the "bounce" was very short lived, I've been pondering this, and today had some time to bore myself senseless reading AirNZ Policy. The striking thing seems that while the big wigs are perfectly entitled to to trade the company shares during 8 months of the year, in the current period March->Jun, they all chose to do so in a very tight window. And the vast majority of trades were Sells.

No wonder people are left wondering why the exodus? and what might they know that we don't?

You too can numb your mind here and ponder the significance: http://www.airnewzealand.co.nz/assets/PDFs/Securities-Trading-Policy.pdf

8027

[noodles]

I started this analysis with an open mind. Given the recent share price drop, talk of pe=4, and with a view to enter the stock, I was keen to look at how AIR is valued on a normalised basis . By this I mean using profit margins for the last 10 years and depreciation values that reflect average capital spend.


As we know, when airline margins expand, competitors come in. Additionally, we know AIR is not immune to a weak economy,fuel prices and NZD fluctuates. So we expect margins to contract and expand depending on the business cycle, competitive environment, and multiple other factors.


The table below shows the EBITDA margin and capex for the last few years (and forecasts). I have averaged these up to get a normalised EBITDA % and CAPEX.




Revenue
EBITDA
EBITDA %
Capex


2018
5818
1157
19.9
962


2017
5565
1293
23.2
945


2016
5336
1361
25.5
982


2015


19.2
1118


2014


19.5
644


2013


15.6
426


2012


11.2
623


2011


9.8
797


2010


11.2
433


2009


10.6
318


2008


14.5
284


2007


13.0
571


Average


16.1
675




It is worth noting that management and analysts think the EBITDA margins will peak in 2016.


My normalised Capex should be equivalent to normalised depreciation when calculating profit. I have chosen not to normalise interest charges. I'll accept we may have low interest rates for longer.


The table below normalises NPAT using the average EBITDA margin of 16% and depreciation of $675m as calculated above. This is much higher than the analyst forecast of just $420m in FY16.



Year
Revenue
Actual EBITDA
Normalised EBITDA
Normalised EBIT
Interest
NPBT
NPAT
eps
EV/EBITDA
EV/EBIT
PE


2018
5818
1157
937
262
87.0
174.6
125.7
0.112
4.0
14.4
21.1


2017
5565
1293
896
221
41.0
179.8
129.5
0.115
4.2
17.1
20.5


2016
5336
1361
859
184
62.0
122.0
87.8
0.078
4.4
20.5
30.2



I must admit being a bit shocked by the result. In 2016 we get an actual pe=4. But we get a FY16 normalised pe=30! It drops to 20 in fY17. Still, at current prices and on a normalised basis, we could argue for a much lower share price.

So surely I must have missed something here. Will EBITDA margins stay elevated for longer? Is it different this time? Should the GFC margins be excluded? Is this why management are selling?

So as an exercise, I put in a margin of 19% given analysts are look looking at the margins in FY18. See below


Year
Revenue
Actual EBITDA
Normalised EBITDA
Normalised EBIT
Interest
NPBT
NPAT
eps
EV/EBITDA
EV/EBIT
PE


2018
5818
1157
1105
430
87.0
343.2
247.1
0.220
3.4
8.8
10.7


2017
5565
1293
1057
382
41.0
341.1
245.6
0.219
3.6
9.9
10.8


2016
5336
1361
1014
339
62.0
276.6
199.1
0.177
3.7
11.1
13.3



Perhaps this is more reasonable. But what the exercise highlights to me is the sensitivity of the EBITDA margins and the impact a normalised depreciation has on the NPAT.

GLTAH

[Beagle]

Thanks for the link Baa Baa. I will use that as part of my e.mail, as per what follows I had a brief read of that and noted the clauses pertaining to inside information. Honestly the mind absolutely boggles with how management selling in the few days leading up to the release of the FY17 outlook, (note that this was not a downgrade per se), but nonetheless was profit guidance that was at a material variation to consensus analyst expectations. I think shareholders are owed an explanation so I will bang off an appropriately worded communication addressed to Tony Carter as soon as time allows this coming week and will post what reply I get, if any. This will not amount to the scope of another SUM type campaign because I know already from prior experience that they have a technical escape clause in that the SP went up on the day of release of the investor day presentation but I think Tony Carter and the board need to know that management couldn't possibly have known that would be the case for sure and they also need to know shareholders are extremely disappointed with the degree of latitude management have taken here...maybe there is an opportunity for a restricted persons trading policy guidelines improvement here along similar lines to SUM other improvement I recall. All it might take is one e.mail and a discussion so I'll give it a go on behalf of all shareholders and see what happens.
Post #6222 is the best I can do late on a Sunday. Too busy this coming week during normal working hours to do it and timing is crucial here so hopefully my efforts make a difference for other shareholders.

[Hectorplains]

I started this analysis with an open mind. Given the recent share price drop, talk of pe=4, and with a view to enter the stock, I was keen to look at how AIR is valued on a normalised basis . By this I mean using profit margins for the last 10 years and depreciation values that reflect average capital spend.


As we know, when airline margins expand, competitors come in, fuel prices fluctuate. Additionally, we know AIR is not immune to a weak economy. So we expect margins to contract and expand depending on the business cycle and competitive environment.


The table below shows the EBITDA margin and capex for the last few years (and forecasts). I have averaged these up to get a normalised EBITDA % and CAPEX.




Revenue
EBITDA
EBITDA %
Capex


2018
5818
1157
19.9
962


2017
5565
1293
23.2
945


2016
5336
1361
25.5
982


2015


19.2
1118


2014


19.5
644


2013


15.6
426


2012


11.2
623


2011


9.8
797


2010


11.2
433


2009


10.6
318


2008


14.5
284


2007


13.0
571


Average


16.1
675




It is worth noting that management and analysts think the EBITDA margins will peak in 2016.


My normalised Capex should be equivalent to normalised depreciation when calculating profit. I have chosen not to normalise interest charges. I'll accept we may have low interest rates for longer.


The table below normalises NPAT using the average EBITDA margin of 16% and depreciation of $675m as calculated above. This is much higher than the analyst forecast of just $420m in FY16.



Year
Revenue
Actual EBITDA
Normalised EBITDA
Normalised EBIT
Interest
NPBT
NPAT
eps
EV/EBITDA
EV/EBIT
PE


2018
5818
1157
937
262
87.0
174.6
125.7
0.112
4.0
14.4
21.1


2017
5565
1293
896
221
41.0
179.8
129.5
0.115
4.2
17.1
20.5


2016
5336
1361
859
184
62.0
122.0
87.8
0.078
4.4
20.5
30.2



I must admit being a bit shocked by the result. In 2016 we get an actual pe=4. But we get a FY16 normalised pe=30! It drops to 20 in fY17. Still, at current prices and on a normalised basis, we could argue for a much lower share price.

So surely I must have missed something here. Will EBITDA margins stay elevated for longer? Is it different this time? Should the GFC margins be excluded? Is this why management are selling?

So as an exercise, I put in a margin of 19% given analysts are look looking at the margins in FY18. See below


Year
Revenue
Actual EBITDA
Normalised EBITDA
Normalised EBIT
Interest
NPBT
NPAT
eps
EV/EBITDA
EV/EBIT
PE


2018
5818
1157
1105
430
87.0
343.2
247.1
0.220
3.4
8.8
10.7


2017
5565
1293
1057
382
41.0
341.1
245.6
0.219
3.6
9.9
10.8


2016
5336
1361
1014
339
62.0
276.6
199.1
0.177
3.7
11.1
13.3



Perhaps this is more reasonable. But what the exercise highlights to me is the sensitivity of the EBITDA margins and the impact a normalised depreciation has on the NPAT.

GLTAH

There sure is a lot of sensitivity around this stock! Thanks for the post, very interesting. Confirmed my present bias to stay out but watch closely.

[Beagle]

Noodles - Firstly let me say I normally have the upmost respect for your analysis but I am sorry but in my opinion in this particular instance your figures are fundamentally flawed in a number of ways.

First things first I recommend you should revisit the investor day briefing for an accurate guide to scheduled capex for the next 3 years, the data on 4 traders is woefully inaccurate and at a material divergence to the companies own information provided last Tuesday in their investor day material. I know because I looked into this matter on Friday and noted some major discrepancies.

Secondly if you look at the graph of scheduled committed capex as shown in the investor day presentation you'll realise that AIR is half way through a complete modernisation of its fleet that incorporates significant fleet expansion and by FY19 will have an extremely young average fleet age of only 6.2 years that will be materially expanded from its present capabilities.

My contention is that normalising earnings based on depreciation being normalised because AIR are both significantly expanding and dramatically modernising its entire fleet is a grossly misleading methodology to analyse normalised earnings so I am sorry Noodles but in this case I believe you analysis is fundamentally flawed and without merit.

I note AIR have a policy or writing off their aircraft over their useful life and from time to time when necessary make such revaluations either up or down as considered necessary to ensure their balance sheet values of fixed assets and aircraft show a true and fair view. I have no qualms whatsoever about AIR's depreciation as disclosed in their financial statements and accept it has historically been an accurate guide to the actual utilisation rate of its capital equipment and thus I contend any attempt to normalise earnings on the basis that current and expected depreciation is not a fair representation of asset utilisation is wholly inappropriate. Trust me on this, the accountant in me has been all over this issue like a hawk looking for a feed and there isn't any problem here.

Put more succinctly, if you spoke with AIR management and got the data from them I am 100% confident you would find that if you normalised capex over the years taking out the capex costs of the dramatic fleet expansion and modernisation I am sure you would find that normalised capex was accurately reflected by normal depreciation. If anything normalised capex could be slightly less than depreciation as AIR write their fleet off over 18 years normally but we have a bunch of 21 year old 767-300's still flying well and earning AIR good money that will have extremely low or no remaining book value.

Surely people can understand that when you both substantially modernise and grow your fleet this requires billions of dollars of additional capex. If it were not so AIR would not be presently growing at its fastest pace in its 76 year history while contemporaneous aiming for one of the youngest and most fuel efficient fleets in the world. The PE of 4.2 stands as far as I am concerned...just waiting for the bottom...quite when that is...is the $64,000 question.

[winner69]

That management selling of late seems to coincide with the exercising of options from the incentive scheme

Maybe the timing is tied in with vesting periods and it just happens that one lot was able to be exercised recently

Just a thought

[Baa_Baa]

That management selling of late seems to coincide with the exercising of options from the incentive scheme

Maybe the timing is tied in with vesting periods and it just happens that one lot was able to be exercised recently

Just a thought

A bit more homework and you'd be able to confirm whether the bosses vested options to shares and then sold them. "Seems to coincide" infers that you're speculating that there is a linkage? Either way, its not often someone sells their shares if they think they're going 'up'.
:eek2:

[OldGuy]

Noodles. How do you get such low eps?? It's currently late 40s but you have it at about 7 cents for 2016. That's about 3 or 4 times lower than the forecast divvy alone!!

[Beagle]

I sent this communication to investor@airnz.co.nz this evening, (acknowledge this is probably not my best work because I am tired and its a Sunday night but I have given it my best shot) and would encourage you to add your thoughts in support to the same e.mail address so hopefully we can effect a positive change.


Attention Tony Carter,

Please refer : http://www.airnewzealand.co.nz/assets/PDFs/Securities-Trading-Policy.pdf

Hi Tony,
You may remember me, I was the bloke asking lots of curly questions at the last Annual meeting and we spoke briefly after the meeting.
I am writing on behalf of a significant number of small shareholders that I have spoken with. There is general concern about recent senior management share sales in the week or so leading up to the release of information contained in the investor day presentation.
Shareholders spoken with note a significant SP decline in the four trading days of the week ending Friday 29th April (a drop of 32 cents per share) at a time that senior management were selling.
We also note a significant senior manager sale on Monday 2 May 2016 the day before the investor day presentation that we note was a price sensitive information release that contained what amounted to a profit downgrade for FY17.
We also note that Virgin issued a shocker quarterly result on Monday 2 May 2016 and there is speculation that senior management may have been privy to the general outlook at Virgin not being as healthy as the general market consensus view.
The overall tone of these transactions whether intended or not gives the impression of management selling just before the release of negative news and to be frank it is not a good look.
Some shareholders, myself included, struggle to reconcile senior management selling in the few trading days leading up to the price sensitive FY17 profit downgrade as being consistent with the company's own security trading policy, (see link above for your ease of reference) and in particular note that senior management were obviously involved in the preparation of the investor day material and were well aware that the company was about to issue a profit outlook that for all intents and purposes amount to an outlook downgrade.
I note that while it is conceded that AIR themselves had not previously issued formal guidance for FY17, nonetheless guidance when first issued on 3 May 2016 as part of the investor day presentation was materially lower than existing consensus analyst expectations. I further contend that a reasonable person would expect Air's senior management to be cognisant of that fact.
First things first. My primary goal here is to try and help the board improve its security trading policies so that Directors and Management avoid getting themselves into what could be seen as or perceived to be an insider trading situation.
May I respectfully make the following suggestion for an improvement to your existing security trading policy.
Where senior management are in the process of preparing investor material or any other press release that they or any person would reasonably consider to be price sensitive, (with the exclusion of normal monthly operating statistics) there needs to be a ban in place on securities trading.
I am hopeful the board are anxious to uphold the highest ethical standards so whether real or simply perceived this sort of general market perception is avoided in the future.

I also note that management selling occurred just before the shocker Q3 Virgin result and shock outlook statement for that company. This serves to only amplify shareholders concerns and taken together its a very poor overall look.
Please consider the above and advise if the board are prepared to consider strengthening the securities trading policy along the lines suggested above so as to ensure management are both seen too and perceived to be seen too upholding the highest ethical standards in the future.
The effort I have made here is I hope a catalyst for an improvement but if not as you would expect I reserve my right to lodge a formal complaint with the NZX or FMA.
I am happy to take your call to discuss informally once you've had a chance to discuss with the board.
Many thanks for your excellence governance and hopefully you good folks can see from a shareholders perspective where I am other shareholders are coming from in this matter.
Thanking you in anticipation of your careful consideration of this matter.
Yours faithfully

I still have the upmost respect for the board so hopefully this is a catalyst for positive change. If not maybe another New Zealand Shareholder association tandem effort is required.

Please folks, if you want change and a more level playing field, PLEASE make the effort to add a few words. Even a simple e.mail to the e.mail address noted above saying you support Roger's recent communication might be what it takes to make a positive difference.

[winner69]

Be good to hear from modandm and his forecasts / valuations - usually spot on

[Beagle]

Be good to hear from modandm and his forecasts / valuations - usually spot on

Yeah it sure would be great to hear from him. He's sorely missed on this thread lately.

[BeeBop]

Have just sent a one line email in support of yours (as above)

[see weed]

Good on you Roger and Beebop. I don't have AIR at the moment. But give im heaps, take im to the FMA.

[winner69]

Model update

Been through the FY15 results in detail now, I have to say operating expense growth was higher than I expected, while the costs of the new fleet are proving lower - good deal those 787s!

I have re-adjusted my assumptions line by line, and also incorporated higher growth rates for labour costs, 6% and 5%, reflecting capacity increases, rate increases, and the bonuses staff are now getting (well deserved!). I have also slightly boosted the contribution from VAH expected, and the tax rate to reflect VAH contribution.

For fuel costs this year I use 70 USD bbl, into wing (includes crack and delivery). For NZD/USD on this calc I use 72c which is somewhere between spot and the hedges (80c). I use 70 bbl and 63c for FY17. I include hedging costs/losses.

I then use 3 scenarios for pax revenue growth (which reflects capacity and group wide yield after FX)

Bear case 4% then 2% gives EPS 44c then 35c
Base case 6% then 2% gives EPS 48c then 40c
Bull case 8% then 3% gives EPS 54c then 48c

At this stage in the year we are tracking at 10.1% growth so ahead of bull case. I expect this to fall as comps toughen post December, but this will be offset by FX gains and Argentina too so who knows exactly where we end up. Blue sky 10% gives 57c in EPS.

My valuation is now set 1 year out at 8x Base case FY17 giving $3.30 target price plus 25c in dividends = 40% upside. For longer term holders like myself there is further special dividend potential in FY17 and FY18.

Lets hope operating stats remain strong.

All the best

-mod

Financials playing out as per mo's forecast - the bull case that is

That post was back in October and even then mo had F16 as peak pfit with a decline in F16

Even his base case valuation was $3.30 (bull case not stated but prob around $3.70 odd)

This week will be a good one for the AIR share price

[percy]

this week will be a good one for the AIR share price

Well if it is it will be going against the tide, as the share price at $2.36 is well below all the EMA moving averages.
50 day EMA,$2.79
100 day EMA,$2.81
200 day EMA,$2.78
499 day EMA,$2.54.
Good luck to buyers and holders.

[winner69]

Well if it is it will be going against the tide, as the share price at $2.36 is well below all the EMA moving averages.
50 day EMA,$2.79
100 day EMA,$2.81
200 day EMA,$2.78
499 day EMA,$2.54.
Good luck to buyers and holders.

Numbers Shows you how AIR has hardly gone anywhere for 2 years, most of those lines flat eh - averaging $2.74 odd and cycling between $2.35 and $4.20 odd

Last week a spike down - this week the start of a cycle up

No good luck needed

[percy]

14th April $3.02,
18th April $2.86
29th April $2.46
6th May $2.36
Just a steady downtrend to me.

[vin]

Expect an uptrend to kick into gear soon...

[RTFQ]

Roger Well said, THANKS

[winner69]

14th April $3.02,
18th April $2.86
29th April $2.46
6th May $2.36
Just a steady downtrend to me.

Thats what happens when a stock cycles from highs to lows if a long established trading range

Put the numbers up in a few weeks time shall we

[percy]

Thats what happens when a stock cycles from highs to lows if a long established trading range

Put the numbers up in a few weeks time shall we

I would think the numbers in a few weeks time will give us a better idea whether the downtrend has stopped,continued,or changed .

[OldGuy]

On a different note, interested to hear how people think the uprise of P2P accommodation will affect the likes of AIRNZ? IMHO, it is a massive coup. P2P accommodation (like AirBnB) reduces the cost of travel by lowering the daily accommodation cost, and therefore will increase demand...

[Beagle]

They agree to settle long running Cargo claim for US$35m. I am sure someone else will post the link. Makes recent management selling look even worse as they would have known for certain that the company was looking to settle this thing. Net effect is to diminish NTA by 4.6 cps. Adds fuel to my tank in terms of my determination regarding yesterday's post. Sell and then get all the bad news out there eh. What's next ?

On a brighter note..(goodness don't we need it) Tourism set to continue to boom http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11635718

[OldGuy]

I get a drop of 3.1c. How did you get 4.6?

[blockhead]

I'm sure the likelihood of that being settled sooner or later has been factored in by most punters, at least it is out of the way now.

[Beagle]

I get a drop of 3.1c. How did you get 4.6?

U.S35m / 0.68 = $51.47m Kiwi / 1,122.8m shares = 4.584 cps - 4.6 cps rounded.
In other news on the NBR this morning http://www.nbr.co.nz/article/carry-bigger-aircraft-bring-major-changes-air-nz-regional-routes-ng-188716

Acknowledge I am not in the greatest frame of mind regarding AIR at the minute but with regional loads falling slightly lately one might wonder how loads will stack up in the short term going forward, especially during the off season. Still one might say they're well positioned to capture the ongoing compounding 10% per annum tourism growth so only a matter of time till those domestic planes will be choc-a-block full again.

Disc - Holding a modest stake, won't sell it but won't increase it either until I am sure the turbulence has diminished.

[OldGuy]

Sorry, didn't realise the $35m was USD.

[winner69]

Good to see more direct WGN QZN fights on bigger planes - always a pain going through CHC although the direct flights on the small planes were awesome on finevdays

[winner69]

Re that settlementv- good to hear 'we did no wrong'

The $50m not included in the $800m forecast. Will be treated as an abnormal non-recurring so doesn't really matter anyway

Already factored in so lets just move on

[Beagle]

Re that settlementv- good to hear 'we did no wrong'

The $50m not included in the $800m forecast. Will be treated as an abnormal non-recurring so doesn't really matter anyway

Already factored in so lets just move on

Market seems unaffected by it and anyway is already trading at quite a big discount to the new consensus broker valuation of $2.82
http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/consensus/ Maybe you timed your re-boarding pass activation to perfection :)

[couta1]

$2.60 low valuation so whatever way you slice it,it's currently undervalued.:cool:

[Jantar]

I don't know what AIR are doing with their pricing for long haul flights. I intend flying to Vienna next year and the route I'm looking at is AKL-SFO on ANZ then SFO - Vienna on Lufthansa. If I book through AIR the cost is almost double compared to booking through Lufthansa. Same flights, same seats, same timetable. What is going on?

I am still researching the possible alternatives at this stage, so maybe AIR will come up with a deal closer to the time.

[OldGuy]

Anyone know why today's daily change suddenly switched from the difference to (i) the previous close of $2.36, to (ii) a higher value of $2.395??

[Robomo]

Anyone know why today's daily change suddenly switched from the difference to (i) the previous close of $2.36, to (ii) a higher value of $2.395??

If you are looking at the ASB Sharetrader site it appears to be malfunctioning with all Share Prices. It was abnormally slow on Friday and obviously whatever the cause was, it hasn't been fixed!

[OldGuy]

Ah right, thanks!

[Regi]

Anyone know why today's daily change suddenly switched from the difference to (i) the previous close of $2.36, to (ii) a higher value of $2.395??
Same with ANZ though I think. Doesn't seem that is exclusive to ASB. Not sure.

[boysy]

Same sell down trend continuing today with the SP up in morning trade only to be sold down lunch time. Where will the support level be this afternoon.

[couta1]

Same sell down trend continuing today with the SP up in morning trade only to be sold down lunch time. Where will the support level be this afternoon. No big daily decline like last week and it did hit $2.34 this morning so let's see if breaches that. Today's news of the 52Mill settlement would have bought more weak holders out of the woodwork putting the brakes on any SP advancement anyway. Then when the price starts to climb you'll have traders profit taking so it's nap time for long term holders at the moment as there's not much to view due to heavy cloud cover.

[skid]

The 2.35 by many standards is an important resistance so it will be interesting--If chartists are right and it breaks below,we will see if ''weak holders'' are ''smart non holders'' who knows? The only thing we can count on is that any absolute labels are total guess work.

but I get what you mean--It must be spooky

[boysy]

Do we now have sufficient volume to quantify a breach of the support level. Must be brave buying at these levels based on recent action of lower lows especially heading into close.

[couta1]

Skid, calling 'weak holders' that sell 'smart non holders ' is a paradox IMO. It's the weak holders that cause the share price to continue to drop by lining up to sell at lower and lower prices.(It would be interesting to see what percentage of these sellers are making any profit, I would hazard a guess that the majority are losing) so not really that smart when it comes to a blue chip, divvy paying stock like Air. PS-Ive been one of those smart non holders before that wasn't so smart after all, when selling other stocks.

[boysy]

Emotive holders starting to circle the wagons it appears. The market can be irrational far longer than holders can stay solvent. Realistically things are only going to get worse from here headwind wise for AIR the shares would have appeared to outrun themselves. Hoop where's the next support level it's still getting sold into the 230 line now.

[Beagle]

Thank you folks for your support to my communication to AIR directors both on here, by PM and by e.mail. We have some very high quality directors and I am hopeful they are keen to have and be seen to have the highest ethical standards of behaviour by management so will be happy to amend and strengthen their security trading policy guidelines and am hopeful for a positive result along similar lines to what was achieved for Summerset. When I hear back I will post the result on here.

[kelfy]

I bought back my first log last week at 2.58 and now is 2.31. Should get ready for the 2nd purchase.

[dobby41]

I bought back my first log last week at 2.58 and now is 2.31. Should get ready for the 2nd purchase.

Buy the 2nd lot at 2.31 and you could then buy the 3rd at 2.15

[axe]

Re that settlementv- good to hear 'we did no wrong'

The $50m not included in the $800m forecast. Will be treated as an abnormal non-recurring so doesn't really matter anyway

Already factored in so lets just move on

Yes already factored in. One road block removed getting ready for the special divvy for full year. Uncle John wants a special for election year phat surplus.

[couta1]

I bought back my first log last week at 2.58 and now is 2.31. Should get ready for the 2nd purchase. If the price is anywhere near this level when my IFT goes ex divvy, I'll be buying a whole lot more. PS-Ive always thought that saying about the market staying irrational longer than you can stay solvent a bit silly for those prepared to hold a stock for the long term and don't need to use the money elsewhere.