Good on you TTG, 40% is a nice round figure although you'll probably get wrist slapped by the odd naysayer.
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Hope no mass grounding of AIRplanes
http://www.stuff.co.nz/business/8374...-due-to-cracks
I'm mostly blowing my dividend. I'm just grateful there's no DRP otherwise I'd feel compelled to reinvest.
I'm definitely going to do more travel and maybe I'll even get me one of them fancy lg OLED TVs (maybe not this year) One thing is for certain: when it's in my bank account I'm fixing myself a few daiquiris - white rum, lime juice, simple syrup, ice and give it all a good shake. No need for a blender. I've always loved them.
Fair enough--I realize everyone has their own viewpoint---Its just a bit beyond me how one can put a positive spin on ''steep drop in underlying earnings'' (possibly earning half what they did this time around)--If their warning comes to pass,you may have quite a job ahead of you:)
I am not a naysayer but when i was younger and less experienced I liked round figures and taking risks expecting big gains.It was a painful lesson on how this approach can fail
Life has changed my approach.
Diversification and balancing is a safer and more productive approach.
Market aware of this steep drop in earnings for a while .....and has reacted accordingly by marking the price down by more than 30% from where it was
Market pretty smart eh
No worries here
Have you read the other comments since? Record profit that was opportunistic, I see it for what is, is there inherent risk, yes like with everything...they have a decent plan with proven management to provide a dividend medium term which appears sustainable, buy in at the right price provides superior rate of return vs alternatives on NZX.
Where is ever growing profit come into this rational ? Yes it would be nice however life an't always like that. If the world retrenches AIR appears in a robust position given the captive market they hold and age/demographic who is flying. In a financial world struggling for yield and failing to find it, I can take a calculated risk where the capital level invested to me is not financially threatening, however the yield is compelling.
Actually half my shares were provided by the non efficient market in AIR in the past year via capital gain. There usually seems to be major delays in absorbing information and correctly processing it wrt AIR.
The market at around 2.80 didn't react with the announcement of the VAH loan and then potential sale..earning were going to drop and known in Jan...classic examples.
Look through the media sound bite and what do you see..if many had done that on Brexit they would have made serious money in a week like I did.
As has already been commented on, this drop in earnings has already been well factored into the SP. Even if the earnings drop down to $400M (well below any projection to date) there will still be sufficient profit and cashflow to maintain the underlying annual dividend of 20cps fully imputed. That is a 12.7% gross return on the current SP, and if the price should drop as low as some are suggesting it could even go as high as 20% gross return. Personally, I do not see the SP going below $2.00 even after it goes ex div, as there are very few other investments that will give such a great ROI.
"...Stephen Bennie, a partner with fund manager Castle Point, said analysts had reduced their 2017 earnings forecasts for the airline by an average of 29 per cent following the renewed management guidance.
"They really caught analysts out with how much they were being impacted by increased competition and fuel prices rebounding," Bennie said...."
http://www.nzherald.co.nz/business/n...ectid=11702222
I'm not convinced that fuel prices will rebound too strongly but holding a couple of oil majors acts as some sort of insurance (BP and Shell also good divi payers circa 6 to 7%).
I love this doom and gloom. Bring it on. Money waiting to be invested. Drive it down more. Come on skid make a day of it.