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Thread: AIR NZ

  1. #1531
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    Quote Originally Posted by Roger View Post
    http://www.sharechat.co.nz/article/3...4-bln-losshtml

    Jetstar loses ground in New Zealand.

    I also had a quick look at the Qantas horror result and noticed contained therein a mention that there was to be no new routes for Jetstar for the forseeable future or words to that effect...

    PS Three other things to know about dividend stripping. Based on a study I've seen approximately 80% of companies share prices regain the initial SP dividend drop within 3 weeks and secondly anyone on an income tax bracket below $48,000 (i.e. tax rate of 17.5%) will normally get a meaningful advantage conferred upon them with fully imputed dividends having imputation credits attached at the company tax rate of 28% and finally the bigger the dividend as a percentage of the stock price, (in this case a whopper at 7%), the more likelihood of dividend stripping being a successful trading strategy
    I wish it were with PGW, but so far not the case.
    No advice here. Just banter. DYOR

  2. #1532
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    Quote Originally Posted by tzbang View Post
    yeah so, buy the day after the divy when it's fallen.. takes 3 days... by then it's probably returned to pre-div levels and sell? Seems too easy.
    Hi Tzbang....yep easy when there is a bull market running..this is when all us posters on ST are financial genius's...It's when the tide turns we find out who the real genius's are...
    AIR's bull market cycless don't last as long as other stocks...AIR is a very cyclic stock...This +300% AIR bull is 2 years old now, a year longer than the 2006/2007 300% Bull.

  3. #1533
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    Quote Originally Posted by noodles View Post
    The dividend is fully imputated so that argument does not apply here.
    It does for all those on the top tax rate the imputation doesn't save you anything at the end of the day other than giving you more money in your pocket until you square up your end of year tax return at which time you still have to account for the difference between the RWT and the 33% you need to pay, claiming the imputations against the tax payable on your taxable income accounts for the difference.
    Last edited by couta1; 28-08-2014 at 09:42 PM.

  4. #1534
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    Quote Originally Posted by couta1 View Post
    It does for all those on the top tax rate the imputation doesn't save you anything at the end of the day other than giving you more money in your pocket until you square up your end of year tax return at which time you still have to account for the difference between the RWT and the 33% you need to pay.
    Maybe we have a different understanding of how imputation credits work. Sure there is a difference between the 28%(company) and 33%(top personal). However, I'm sure you would agree that having imputation credits is better than not having them?
    Last edited by noodles; 28-08-2014 at 06:24 PM.
    No advice here. Just banter. DYOR

  5. #1535
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    Quote Originally Posted by noodles View Post
    Maybe we have a different understanding of how imputation credits work. Sure there is a difference between the 28%(company) and 33%(top personal). However, I'm sure you would agree that haveingimputation credits is better than not having them?
    Agreed it is better having them especially if they come with a PIE investment as those on the top tax rate don't have to include them in their tax return saving 5% tax however for those on the top rate buying ex divvy can be a good strategy.

  6. #1536
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    Quote Originally Posted by noodles View Post
    Maybe we have a different understanding of how imputation credits work. Sure there is a difference between the 28%(company) and 33%(top personal). However, I'm sure you would agree that haveingimputation credits is better than not having them?
    This man speaks the truth - its effectively them paying the tax burden on your behalf. By the means of passing already paid tax income tax from the company) onto the recipient. Just means the end recipient doesn't end up being 'double dipped' by the IRD

  7. #1537
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    Quote Originally Posted by noodles View Post
    I wish it were with PGW, but so far not the case.
    There's always an exception to general market behaviour. The jury is still out on this case and I hold. What we saw in that case was an annual result that was only very slightly ahead of recent guidance together with the announcement of a final and special divvy that appeared to surprise the market, (myself included). We then witnessed a near vertical move in the SP in a very short space of time by the amount of the dividend and a cent or two more, followed by a drop of the full dividend and a cent or so more immediately after it went ex divvy and still hasn't recovered. The SP behaviour suggests dividend hounds chased the stock up to strip it and the 28% imputation credits attached, suggesting a number of shareholders or dividend hounds are on a 17.5% tax rate perhaps ?

  8. #1538
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    Quote Originally Posted by Roger View Post
    The SP behaviour suggests dividend hounds chased the stock up to strip it and the 28% imputation credits attached, suggesting a number of shareholders or dividend hounds are on a 17.5% tax rate perhaps ?
    My theory is that there is a negative sentiment in the stock because of low diary prices. I won't talk any more because it has been thrashed out on the PGW thread.

    But it is an interesting case study because the magnitude of the dividend of AIR and PGW are similar. We shall see with AIR.

    I own both PGW and AIR. I don't plan to strip the dividend.
    No advice here. Just banter. DYOR

  9. #1539
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    It certainly is an interesting and in my view a very relevant case study as its rare that you get two cyclical companies to compare, both of whom are paying final and special divvy's that amount to circa 7-8% of their SP. Like you, I own both and see both as a good medium term hold.

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    VAH have sold a 35% stake in their Velocity FFP to Affinity Equity Partners.

    http://www.asx.com.au/asxpdf/2014082...fffwptmkvl.pdf

    The consensus from previous discussions appears to be that AirNZ was unlikely to sell Airports to a private partner outright, especially given that they are already flush with cash, but perhaps a similar arrangement could benefit the AirNZ from a strategic perspective?

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    Just as well AIR not equity accounting Virgins profit this year

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    Quote Originally Posted by Zaphod View Post
    VAH have sold a 35% stake in their Velocity FFP to Affinity Equity Partners.
    Hmmm, that's interesting. I guess FlyBuys isn't owned by the companies that run use it so why should an airline FF program have to be?

    Personally, I think that selling a FF program is a bad idea. It's a core part of the marketing of the airline and if the FF program does something that customers don't like, it's the high-value customers that it is going to annoy the most. Admittedly this is only a minority stake but it still strikes me getting a short-term gain in exchange for long-term pain.

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    Quote Originally Posted by winner69 View Post
    Just as well AIR not equity accounting Virgins profit this year
    Short term pain for 2015 for long term gain ?
    AIR took restructuring costs of $45m related to redundancy and fleet transitional costs in the financial just released which is non-recurring so while I guess its fair to say there could be some pain next year from their 25.99% stake in VAH I think from a strategic route expansion perspective AIR's directors clearly see the value, especially in the long term. At a rough guess one matter might replace the other next year so no impact on 2015 normalised profit.. Have I mentioned shareholders are "well positioned" ?

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    I would say Virgin better positioned than Qantas in Australia as well

    Best one to choose as a partner

  15. #1545
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    Quote Originally Posted by mikeybycrikey View Post
    Hmmm, that's interesting. I guess FlyBuys isn't owned by the companies that run use it so why should an airline FF program have to be?

    Personally, I think that selling a FF program is a bad idea. It's a core part of the marketing of the airline and if the FF program does something that customers don't like, it's the high-value customers that it is going to annoy the most. Admittedly this is only a minority stake but it still strikes me getting a short-term gain in exchange for long-term pain.
    AC floated around 15% of their Aeroplan FFP in the early 2000's and then later sold their final stake several years later. Floating and then later selling FFP did provide them with a financial windfall and the new company is completely focused on becoming a leading consumer loyalty programme, and has all of the traits (e.g. Points accumulation via Credit cards, Supermarkets, etc.) of AirNZ's FFP.

    I personally don't see any justification for AirNZ selling theirs at the moment, but perhaps in the long term it could provide a cash windfall for shareholders while also ensuring that the FFP gets the laser focus on customer acquisition that it might other not have.

    It would however be nice to see a more detailed breakdown in the financial reports of the impact that the loyalty programme is having on revenue.

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