AIR - Air NZ.

[carrom74]

Carrom -- this is interesting

https://crucialperspective.com/risin...irline-stocks/

Even though it says

INVESTORS TEND TO AVOID AIRLINE STOCKS WHEN OIL PRICES RISE – NEARLY 90% OF THE ASIA PACIFIC AIRLINE STOCKS HAVE HISTORICALLY BEEN NEGATIVELY CORRELATED WITH SPOT JET FUEL PRICES

it also says

AUSTRALIA/NEW ZEALAND AND JAPANESE CARRIERS HAVE THE MOST DEFENSIVE EARNINGS AGAINST HIGHER OIL PRICES

and the bottom chart shows AIR has only a slightly negative correlation (not significant) between share price and fuel -- as Hoops old chart showed



Let me know if you are now a lot wiser ...

Thanks Winner for helping me out..and pasting the link which was quite good.

I ended up analyzing one of the airlines mentioned in the link(Jet airways-randomly picked) and due to the rise in the oil prices the airlines reported a loss this quarter and the share price tanked to a 52 week low.Whereas AIR which is a "safe hedge bet" has pretty much weathered the storm(7% drop YOY on SP)and forecasting a record profit...

https://www.odt.co.nz/business/air-n...ident-position

You may have read this report... Both Morningstar and Craigs have highly conservative target prices...

[winner69]

Carrom - just for you a longish term chart of AIR share price v Oil in NZD

Sometimes oil goes up and AIR goes down and then again sometimes oil goes up and AIR goes up


Interesting but oil not a particularly reliable indicator of AIR share price movements - except that when oil prices are over NZ$110 the AIR share price tends to be at its weakest ....and we could be approaching that danger zone now


Statistically over that 15 year time frame there is reasonable negative correlation between the two and oil accounts for about 30% of the change in AIR share price (not allowing for any possible lag effect)

What you think?

[percy]

Current share price $3.165
Craigs target price $2.85
Morningstar target price $2.60.
So stand to lose 10% or 18%.????
Will leave it to others to choose.?

[carrom74]

Carrom - just for you a longish term chart of AIR share price v Oil in NZD

Sometimes oil goes up and AIR goes down and then again sometimes oil goes up and AIR goes up


Interesting but oil not a particularly reliable indicator of AIR share price movements - except that when oil prices are over NZ$110 the AIR share price tends to be at its weakest ....and we could be approaching that danger zone now


Statistically over that 15 year time frame there is reasonable negative correlation between the two and oil accounts for about 30% of the change in AIR share price (not allowing for any possible lag effect)

What you think?

Winner--I agree that oil is not thesole contributor for sp movement but i suspect if some judiciously strategies are formulated on fuel hedging then that can help add more $$$ towards the bottom line.

Also oil is inching towards the danger zone now-Gulp!

[winner69]

Winner--I agree that oil is not thesole contributor for sp movement but i suspect if some judiciously strategies are formulated on fuel hedging then that can help add more $$$ towards the bottom line.

Also oil is inching towards the danger zone now-Gulp!

You holding ...or thinking of buying

[carrom74]

You holding ...or thinking of buying

My Biggest holding winner.Kept adding on dips.

[Beagle]

Current share price $3.165
Craigs target price $2.85
Morningstar target price $2.60.
So stand to lose 10% or 18%.????
Will leave it to others to choose.?

The average of all six analysts that cover the stock is $3.21, see http://www.4-traders.com/AIR-NEW-ZEA...407/consensus/

My sense is the shares are worth about that. Disc: Own a quite modest stake as part of a well diversified portfolio.

[percy]

The average of all six analysts that cover the stock is $3.21, see http://www.4-traders.com/AIR-NEW-ZEA...407/consensus/

My sense is the shares are worth about that. Disc: Own a quite modest stake as part of a well diversified portfolio.

Thank you I did look at 4-traders.I have been looking to buy.
Only thing holding me back at present is AIR's chart,with their share price under both the 90 day and 180 day moving averages.
Otherwise I am happy with their performance and outlook.

[Beagle]

Thank you I did look at 4-traders.I have been looking to buy.
Only thing holding me back at present is AIR's chart,with their share price under both the 90 day and 180 day moving averages.
Otherwise I am happy with their performance and outlook.

You're welcome. I agree from a TA perspective it doesn't look all that good right at the minute. For what its worth I am holding for its dividend yield and the diversification it gives my portfolio.

I'm expecting annual fully imputed dividends of ~ 22 cps 22 / 0.72 = 30.55 cps gross which gives close to a 10% gross dividend yield. There is also the prospect of one or two special divvies in the years ahead. I'm not expecting great things in terms of share price appreciation but the yield has its attractions and its different to any other NZX listed company so adds worthwhile diversification in my opinion. I hold just a 2.4% portfolio allocation but am favorably inclined towards adding some more on any further weakness as the next ~ 11 cps divvy is just on 2 months away. As I understand it they have a couple of leased 777-200's to cover the engine issue resolution process now so the main risk I see, (although one can't completely rule out the prospect of another Rolls Royce engine shatting itself with further collateral damage to another plane) is some extravagant move northwards in the oil price.

As you can see I am not nearly as bullish on this as I was in the past when it was cheaper. That said I think management have done a good job this last year with dealing with quite a number of difficult challenges.

[percy]

You're welcome. I agree from a TA perspective it doesn't look all that good right at the minute. For what its worth I am holding for its dividend yield and the diversification it gives my portfolio.

I'm expecting annual fully imputed dividends of ~ 22 cps 22 / 0.72 = 30.55 cps gross which gives close to a 10% gross dividend yield. There is also the prospect of one or two special divvies in the years ahead. I'm not expecting great things in terms of share price appreciation but the yield has its attractions and its different to any other NZX listed company so adds worthwhile diversification in my opinion. I hold just a 2.4% portfolio allocation but am favorably inclined towards adding some more on any further weakness as the next ~ 11 cps divvy is just on 2 months away. As I understand it they have a couple of leased 777-200's to cover the engine issue resolution process now so the main risk I see, (although one can't completely rule out the prospect of another Rolls Royce engine shatting itself with further collateral damage to another plane) is some extravagant move northwards in the oil price.

As you can see I am not nearly as bullish on this as I was in the past when it was cheaper. That said I think management have done a good job this last year with dealing with quite a number of difficult challenges.

My airline chief advisor [Murray of avionics fame] would agree with you.
He also says the type of planes they are flying in NZ are a lot lighter than previous planes, and the sayings on fuel are considerable.
ps.Yield will be higher at $2.99....lol.