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Thread: AIR - Air NZ.

  1. #5001
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    Maybe this is a reason for the lacklustre last couple of days

    http://www.smh.com.au/business/retai...22-gn04oi.html

    Read down to the candidates.

  2. #5002
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    Really speculative article. I think he really enjoys his job at AIR. In my opinion one or two institutions have taken an overtly negative view of the global economic environment or the extra airline competition coming to N.Z. and there's been a glut of shares on the market. I'm going to ride it out. I expect analyst upgrades next week which other institutions will take note of, and then we'll have a better balance of buyers and sellers.

    I'll be honest I don't understand the dichotomy between how the market has re-rated other airline stocks, American airline index is up circa 20% in recent weeks and how QAN with similar EPS numbers to AIR is somehow worth over $1 more ? All these others carriers are also facing their own set of challenges and competition and we live in the same global economic environment last time I checked, go figure ?
    Last edited by Beagle; 26-02-2016 at 06:11 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  3. #5003
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    Maybe it's just one holder selling down their stake?

  4. #5004
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    Yes that would appear to be the case Longhaul. Plenty of supply of shares have been flooding onto the market lately so some institution or other, (that obviously doesn't read these forum pages), has decided to significantly reduce or exit their position.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  5. #5005
    Speedy Az winner69's Avatar
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    AIR is a cyclical (consensus). As such valued over the whole cycle - ie expect low PEs when earnings are good and vice versa

    However cyclicals do 'uptrend' as well in that the cyclical highs (and lows) do get higher reflecting increased profits over time

    The puzzle with AIR at the moment is that this $3 mark is a real barrier. Peaked about here in 2007
    When AIRs es was less than 30 cents (Roger can give real figure) - now eps heading ver 60 cents in F16 and even more in F17.

    But $3 remains as a major resistance.

    Sanity needs to prevail sometime ....yes?
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  6. #5006
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    Quote Originally Posted by Roger View Post
    Yes that would appear to be the case Longhaul. Plenty of supply of shares have been flooding onto the market lately so some institution or other, (that obviously doesn't read these forum pages), has decided to significantly reduce or exit their position.
    Probably been held hostage by overseas fundies who see the world as a bit gloomy at the moment and perceive little airlines in some far flung part of he world as risky.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  7. #5007
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    Quote Originally Posted by winner69 View Post
    Probably been held hostage by overseas fundies who see the world as a bit gloomy at the moment and perceive little airlines in some far flung part of he world as risky.
    The stockmarket is a popularity contest in the short term but a weighing machine in the long term.

    Investors have to decide whether they are in the market to participate in a popularity contest in the short term or not.

    The airline industry is a glamorous one but history shows that the beauty is not long lasting.

    Can remember investors paying 10 times peak earnings back in the old days before deregulation but these days, 5 times is considered reasonable value.

    Bit like the IT industry really. Apple trades on a forward multiple of 9.7 times - that's not a very demanding multiple.

    So will it be different this time?

  8. #5008
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    Quote Originally Posted by winner69 View Post
    AIR is a cyclical (consensus). As such valued over the whole cycle - ie expect low PEs when earnings are good and vice versa

    However cyclicals do 'uptrend' as well in that the cyclical highs (and lows) do get higher reflecting increased profits over time

    The puzzle with AIR at the moment is that this $3 mark is a real barrier. Peaked about here in 2007
    When AIRs es was less than 30 cents (Roger can give real figure) - now eps heading ver 60 cents in F16 and even more in F17.

    But $3 remains as a major resistance.

    Sanity needs to prevail sometime ....yes?
    Quote Originally Posted by winner69 View Post
    Probably been held hostage by overseas fundies who see the world as a bit gloomy at the moment and perceive little airlines in some far flung part of he world as risky.
    You answered your question with your next post. The compelling value will eventually shine through but who can predict when... I guess people have to decide for themselves if the turbulence is too much or whether they trust management to stay on board for the long haul. I'm a long haul bloke on this one. Over 30 years of investing has taught me its a very rare thing to find companies this well managed and on these compelling metrics. By any rational comparison with other airlines AIR looks incredibly good value.
    Last edited by Beagle; 28-02-2016 at 12:28 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  9. #5009
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    "companies this well managed and on these compelling metrics".
    Always has been and always will be the recipe for success.
    Affordable air travel means more people use planes more like buses.
    My son-in-law works 17days on, four days off, near Hamilton. He flys home for his days off.
    I went to Auckland for the day book buying a couple of weeks ago.
    My retired mate and his wife fly to visit their daughters and their grand children in Auckland and Tauranga.
    They fly down regularly to visit him and his wife.
    My niece's husband flys down to work four days a week in Sydney.They live in Nimbin.
    I meet a mining engineer in Pauanui who commutes to his job in Western Australia.
    None of the above covers air travel for tourism.
    Last edited by percy; 28-02-2016 at 02:07 PM.

  10. #5010
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Roger View Post
    You answered your question with your next post. The compelling value will eventually shine through but who can predict when... I guess people have to decide for themselves if the turbulence is too much or whether they trust management to stay on board for the long haul. I'm a long haul bloke on this one. Over 30 years of investing has taught me its a very rare thing to find companies this well managed and on these compelling metrics. By any rational comparison with other airlines AIR looks incredibly good value.

    What do they say - share price (eventually) follows earnings

    So Roger, just take advantage of "punters" folly as somebody posted yesterday
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

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