AIR - Air NZ.

[Eval]

Good for the Airlines, Cheaper Oil, 2018 outlook more brighter for the Airliners

http://money.cnn.com/2017/06/14/news/economy/oil-glut-iea-2018-opec/index.html

"Whatever it takes: The International Energy Agency published its first look at 2018 on Wednesday, and the report contains some very bad news for OPEC.
OPEC has been trying for months to eliminate a glut of excess supply that has kept prices from rising. The cartel has pledged to do "whatever it takes."
But its efforts have been blunted by a massive boom in production by U.S. shale operators. The IEA said Wednesday that the trend is likely to continue into next year, with production by non-OPEC nations growing more quickly than global demand.
"'Whatever it takes' might be the mantra, but the current form of 'whatever' is not having as quick an impact as expected," the IEA said.
U.S. crude oil futures dropped 1.4% to trade at $45.84 after the report was released."


Oil drops to 7-month low,

[Tweak]

Sharetrader newbie.

I have been reading this forum for a few months, love reading everyones opinions. Trying to learning as I go. Sold 1/3 of my AIR shares today at $3.15. Happy with the price, but I suppose what's the point in selling if I don't have anything lined up to buy?

[GTI]

Sharetrader newbie.

I have been reading this forum for a few months, love reading everyones opinions. Trying to learning as I go. Sold 1/3 of my AIR shares today at $3.15. Happy with the price, but I suppose what's the point in selling if I don't have anything lined up to buy?

How long would you hold the investment for?

[babymonster]

Sharetrader newbie.

I have been reading this forum for a few months, love reading everyones opinions. Trying to learning as I go. Sold 1/3 of my AIR shares today at $3.15. Happy with the price, but I suppose what's the point in selling if I don't have anything lined up to buy?

Same here, sold some at 3.01 but apart from waiting to buy ebo, nothing to buy. Anyone has any ideas? I have thl Rym already.

[babymonster]

air PE is still under 10 so it's not expensive in that sense

[couta1]

air PE is still under 10 so it's not expensive in that sense

A lot of others factors to consider with a volatile cyclical. PS-There are SUM other good stocks worth buying, along with some others on the NZX, depending on what result you want from the stocks you buy.

[winner69]

A lot of others factors to consider with a volatile cyclical. PS-There are SUM other good stocks worth buying, along with some others on the NZX, depending on what result you want from the stocks you buy.

AIR on a PE seen as cheap .... couts, did you notice SUM other company on a PE of 7.1

That's really 'cheap' eh

[Benny1]

Sold mine yesterday for $3.185..couldn't resist! Hope to be back in again for the Dividend. ..still like the company tho!
I might wait until after the NZShareholders meeting in AKL on Wednesday night..already own some THL and would like more..and like the look of TRA so will enjoy listening to the CEO's before deciding.

[Beagle]

AIR have made steady ongoing improvements in their business model and what we've seen this year which is brand new evidence is their model is now incredibly resilient and highly profitable even in the face of a substantially changed competitive environment. This gives a LOT of confidence looking into the future.

Nobody can reliably tell you where we are in the business cycle. This year I believe we are looking at ~ $575m before tax giving approx. $414m after tax or ~ 37 cps.
The ten year average PE is 11. Pure cyclical companies with no earnings growth should trade on a PE of 10. It is clear that there is some ongoing growth across business cycles, IATA for instance are forecasting ongoing international passenger growth of 5% per annum. I believe in that context a PE of 11 is very reasonable. Further, we live in an ultra low interest rate so adding another 1 multiple for that seems reasonable. A PE of 12 and EPS of 37 cps gives $4.44. (This assumes AIR is currently trading in an operating environment at the mid point of the cycle).

Its clear we're seeing an improving yield environment and competitors are behaving in a generally more rational manner. As I mentioned several times last year, opening specials by new competitors don't last indefinitely so the yield outlook as we lap the period of time in 1H FY17 when ten new competitors were running opening specials for months on end, looks like improving further.. I think the outlook for FY18 and beyond is very sound. N.Z. is a very, very safe destination for tourists and I expect this factor will become increasingly important in the years ahead. I think the outlook as they complete their capex program, fly one of the youngest and from an operational perspective one of the most streamlined fleets in the world and continue to drive efficiencies in their business model and grow in a disciplined manner in line with demand growth, is very bright indeed.

[Tweak]

How long would you hold the investment for?

For AIR looking at 5+ years. Really liking their divi.