AIR - Air NZ.

**Hoop** · 22-02-2017, 12:45 PM

Originally Posted by couta1

Topping up today's with proceeds of another big selldown on another downtrending stock, current average is now $2.22, a huge effort to get it down from $2.80ish. PS-Dont try this at home.

PS-Dont try this at home. I won't. I promise

**couta1** · 22-02-2017, 12:47 PM

Originally Posted by Hoop

PS-Dont try this at home. I won't. I promise

Didn't think you would, your much too conservative and wise for that.

**Beagle** · 22-02-2017, 12:50 PM

Originally Posted by couta1

Topping up today's with proceeds of another big selldown on another downtrending stock, current average is now $2.22, a huge effort to get it down from $2.80ish. PS-Dont try this at home.

Based on our telephone discussions mate I know you haven't taken off the 25 cent special divvy which as I've said before effectively amounts to a return of capital from the sale of Virgin so you're effective net average cost is below $2, actually $1.97 and you have enjoyed solid ordinary dividends as well. I'd say your approach has resulted in reasonable returns thus far...whether its a reasonable portfolio management or risk management approach...seeing as we're good mates I couldn't possibly comment

**Raz** · 22-02-2017, 12:53 PM

Originally Posted by couta1

Topping up today's with proceeds of another big selldown on another downtrending stock, current average is now $2.22, a huge effort to get it down from $2.80ish. PS-Dont try this at home.

don't try at home...ha too late for me been buying...

**Hoop** · 22-02-2017, 01:10 PM

Originally Posted by Roger

I see a nice recovery since early October. I also see that AIR is extremely cheap relative to its peer group and well positioned with a very young fleet and I think its been well lead by Chris Luxon.
I think the result tomorrow might surprise some people, hopefully I'm not one of them

Yes it has been a nice recovery... it has clawed back its 35c payout to its shareholders (sadily, a bit was clawed back in tax)...but the worrying sign on the chart is the price has so far failed to create a higher high which indicates a worry that if the shareprice has in indeed topped out it is another technical sucker rally and the bear cycle continues..
I think some posters have scant respect for Mr Market when it comes to AIR..One must remember Mr Market is made up of all sorts of buyers and sellers, some may be inexperienced but you have to assume that the majority know actually what to expect..The disclosures have been publised very well..I won't be surprised and I'm still not buying ..(I expect the earnings to be around $550M - $600M (top end of the disclosured forecast)) [$457M last year]...So why is the shareprice low? It's due to the uncertainty of the future..The sharemarket is forward looking and sees the typical signs of a cycle that has matured, peaked and is showing signs of waning due to increased competitors, price matching (discounting), lower margins, increased number of planes, etc (cyclical stock text book warning signs)...At this stage of a cyclical stocks cycle earning are still good but the market sees cyclical black clouds forming, hence the PE Ratio warning (very low PE = possible danger)

**Hoop** · 22-02-2017, 01:25 PM

Originally Posted by couta1

Didn't think you would, your much too conservative and wise for that.

...I've recently broken that image mould Couta...I got adventurous and bought some PPH

**winner69** · 22-02-2017, 01:32 PM

Just off one of those infamous Christchurch ATR flights

One good thing with them - don't have to endure those awful safety videos you get on big planes.

And couts - the mosh pit really rocked at Springsteen last night. Awesome night

**Beagle** · 22-02-2017, 01:52 PM

Originally Posted by Hoop

Yes it has been a nice recovery... it has clawed back its 35c payout to its shareholders (sadily, a bit was clawed back in tax)...but the worrying sign on the chart is the price has so far failed to create a higher high which indicates a worry that if the shareprice has in indeed topped out it is another technical sucker rally and the bear cycle continues..
I think some posters have scant respect for Mr Market when it comes to AIR..One must remember Mr Market is made up of all sorts of buyers and sellers, some may be inexperienced but you have to assume that the majority know actually what to expect..The disclosures have been publised very well..I won't be surprised and I'm still not buying ..(I expect the earnings to be around $550M - $600M (top end of the disclosured forecast)) [$457M last year]...So why is the shareprice low? It's due to the uncertainty of the future..The sharemarket is forward looking and sees the typical signs of a cycle that has matured, peaked and is showing signs of waning due to increased competitors, price matching (discounting), lower margins, increased number of planes, etc (cyclical stock text book warning signs)...At this stage of a cyclical stocks cycle earning are still good but the market sees cyclical black clouds forming, hence the PE Ratio warning (very low PE = possible danger)

Happy to bow to your greater technical expertise with TA. On the FA side average analyst forecast this year is $488m before tax and $482m for Fy18. They're very conservative with their "guess" for FY19 just over $400m before tax, (how anyone can possibly expect to reliably guess Fy19 earnings when we're only mid way through Fy17 is anyone's guess) but even on a conservative FY19 estimate they're still on a prospective FY19 PE of only 8 compared to a long run 10 year average PE of 11.

They're very cheap compared to their peer group and very cheap on a historical basis. They'll probably stay cheap because of future concerns regarding earnings but to be clear I am holding for what I believe is an easily sustainable 20 cps in annual fully imputed dividends. 20 / 207, (theoretical ex divvy price if a 10 cent divvy is shortly forthcoming) / o.72 = 13.4% gross yield taking a long term view.

They are only two years away from a major capex program completion and will have a very young and fuel efficient fleet with an average age of only 6.2 years. I think they are a very good hold as a dividend yield stock.

**Raz** · 22-02-2017, 01:53 PM

Originally Posted by winner69

Just off one of those infamous Christchurch ATR flights

One good thing with them - don't have to endure those awful safety videos you get on big planes.

And couts - the mosh pit really rocked at Springsteen last night. Awesome night

A lot of people asked to use my office car park for the night, I only like a few of his songs so I was a cheap skate and just listen to the sound check earlier in the day..hear good night had by all..