Originally Posted by
allfromacell
I think the whole airline industry is worth a lot more theses days then the multiples they have traded on in the past. Oil is looking more likely to stay low, not only because of the glut but also as more countries look start embracing cleaner technology. Planes aren't 'green' in the slightest but it's pretty hard to get around that, the global middle class is growing (with the bulk of this growth coming from Asia) the amount of people flying is growing, cargo is growing. NZ is also in an awesome place to take advantage of theses factors via tourism and a huge population increase now running at around 1.5% P.A! All of this bundled with superb management... What's not to love?
I think the people who believe this company to be overpriced are mislead by the past trading history, looking at the fundamentals, why is it overpriced? I don't see why this company can't trade at $5 as we approach 2020. As MOD and Beagle have pointed out as much as $1.50 worth of potential imputed dividends can be priced in.
I can see an argument for the industry being cyclical and the inherit risk of aviation but I still don't see why this stock should trade at any less than a PE of 10 minus the priced in free cash flow of the early 2020s.