AIR - Air NZ.

[skid]

Been lurking in the background for a long time now and no, its not a material consideration IMO.

Anyway...the U.S. airlines I follow Delta and American airways are both up ~ 10% over the last week. Strong increases overnight on Wall St. Both on cheap forward PE's of less than 6. The sky isn't falling and a similar 10% recovery in AIR from $2.695 would equate to $2.96. I strongly prefer AIR's metrics to either of these other two airlines and anyone that's closely studied the operating stat's knows there's a blinder of a half year result coming shortly and a big increase in dividend. Disc: Bought more this morning on the open.

I think there are alot of factors that could increase the SP or decrease it..but a good result seems to be the worse kept secret around--wouldnt you think that is already factored in? (mind you ,Im often at a loss on the Share price action on this one) I wonder if anyone can really make sense of it in this period...I guess outside markets and competition are the main factors?

Any mention of competition in the Herald seems to take its toll ,but Ive noticed that there is a lag between the news and the SP fall--If one was looking for a pattern they could have sold and bought and done quite well on the second one .

Interesting how that golden $3 mark turned out to be just a passing sign going both ways.

I believe there is a travel Expo this weekend-(Auck)-might be interesting to go and see which company has the biggest crowds at their booth

[JohnnyTheHorse]

Globally, airline stocks are showing stronger technical signals, indicating they may be coming back into favour over the short-med term. I'm playing to it, but keeping a very close eye on it.

Should see an investor update and fuel hedge disclosure from AIR today.

[Raz]

I have been trading AIR for 12 months, prior more long term holder on shares (except xero which I traded from listing) as was too busy making money other ways.

Bought and sold AIR six times, never sold at the top, great overall return after tax ,this is a great traders share however you have to keep you eye on it all the time. Confident a good short term play on the results then the noise will take over once again. Its high media profile near guarantees its volatility.

[Beagle]

Delta and American AIR up further overnight..now recovered circa 13% from their recent hammerings on "fear of the bear". Same recovery for AIR would see it at $3.05 ($2.70 x 1.13).
Agree with Raz and JTH. Forward PE on my estimate of FY16 earnings incl VAH of 68 cps is 4.1 at $2.80. Very high confidence that management will navigate their way very successfully with new competition coming and AIR will remain a highly profitable company. Sure there are risks but in my experience when the PE is 4 there's usually a lot of money to be made.

[Hoop]

I have been trading AIR for 12 months, prior more long term holder on shares (except xero which I traded from listing) as was too busy making money other ways.

Bought and sold AIR six times, never sold at the top, great overall return after tax ,this is a great traders share however you have to keep you eye on it all the time. Confident a good short term play on the results then the noise will take over once again. Its high media profile near guarantees its volatility.

Hmmm....maybe, but maybe it's the other way around, perhaps its the AIRs "natural"(expansion/contraction) activities and the share price behaviour that keeps it in the Media's spotlight

Sorry to harp on, but, one has to keep reminding one's self about the theoretical behavioural characteristics of cyclical stocks..(sorry Roger I said that nasty C....word again).. I've mentioned before (many times) the behavioural characteristics such as very low PE being a warning sign... shareprice being very sensitive to any economic change.. cyclical growth (expansion during consumer good times/contraction during consumer bad times)...sensitive to competition pressures...very sensitive to customer discretionary spending patterns..etc..etc

On a long term chart... cyclicals show a characteristic Oscillation pattern, often correlated with economic activity, usually the lagged activity due to the trickle down effect finally reaching the consumers from the mature business/economic bull cycle..
Also observing the charts on a shorter term... Referring to the results of an overall market (the Index).. the volatility tends to rise during the end/beginning of market cycles (top/bottom) and for the "end is near" disbelievers also during corrections within the market cycles..

Market Sectors also exhibit their own characteristic volatile behaviour ..Defensive stocks (Utilities) usually have a low Beta value.The lower the beta value the more boring the market sector...so one can easily assume the media will run with the more exciting market sectors such as the techs and cyclicals which have a much higher Beta value....Its common to find that some of the best performing stocks are off the radar or have very forum few post numbers often because of few company/media announcements which may or may not contribute to their low beta value..

EDIT:,,, It may be worthwhile to mention that when Beta goes super low e.g negative that stock becomes uncorrelated to its market index behaviour.....eg it's shareprice is uneffected by the index market cycle

[Beagle]

Plenty of cyclical's in the states on a low PE like the aforementioned American airlines, Delta and Ford but there's low PE cyclical's and then low PE cyclical's that have been beaten down aggressively because of fear of the bear and fear of new competition. I used the word cyclical three times. Fear says there's a 50% chance we're entering a world-wide recession but maybe interest rates at 60 year lows and cheap fuel acts like a shock absorber and we get a soft economic landing and a benign consumer environment such that consumers can spend on travel, food, whatever. Perhaps this low worldwide growth continues to supress demand for oil and keeps airfares low and we're entering a golden age of air travel where airlines generally do extremely well...especially the well managed ones...

Interesting article a while back on CNBC, sorry looked for a link but couldn't find it, but essentially the theme was the market isn't treating the gains airlines are receiving from low oil as "real earnings". Yield compression is very real however and to some extent balances out those gains, likewise new competition. Probably ~ $70 oil is better for AIR with its relatively new efficient fleet. If we get there the world-wide economic picture will be more robust, more demand and yields will be higher so maybe those gains from low oil are real and a forward PE of only 4, lower than most other carriers, is a bit low for a company experiencing revenue passenger kilometre growth of 17% on capacity growth of 12%.

AIR by its very nature with so many users and Govt controlled ownership will always be something of a media and political football so volatility and media scrutiny will always be par for the course. This is a stock to own if you are a value investor that's prepared to weather a turbulent ride. Best to keep your seatbelt fastened at all times.

http://www.fool.com.au/2016/02/16/is...rways-limited/ Air beaten down too much ?
AIR are very well positioned to deal with future competition IMO.

[Snow Leopard]

...
PT - If you see Chris Luxon eyeing up those shiny new A350's please tell him we'd all prefer XXXXXL special dividends instead.

Dropped by the Kiwis Can Fly School booth today but not met your mate Chris yet.
Still there is all of tomorrow.

Best Wishes
Paper tiger

[winner69]

Compared to previous months January was a bit slack

Suppose 9% increase in RPK not too bad though

[Beagle]

Pretty solid numbers Winner, not as spectacular as December's but highly credible nonetheless especially in the context of starting two new routes contemporaneously . Fuel hedge position looks good and they're taking the opportunity to collar in low oil prices for 56% of their requirements for the first half of FY17 already, which looks like a sensible move to me.
Load factors good at over 85%. Yields holding up well in this low fuel price environment.

Average broker valuation $3.22. http://www.4-traders.com/AIR-NEW-ZEA...407/consensus/

[JohnnyTheHorse]

Globally, airline stocks are showing stronger technical signals, indicating they may be coming back into favour over the short-med term. I'm playing to it, but keeping a very close eye on it.

The strategy is playing out - a down day on US markets and the airline index (XAL) up 3.23%. Doesn't look like AIR got the message though .