AIR - Air NZ.

[Jantar]

It seems almost every thing has dropped today. Is there something globally going on ? not many greens on my board.

Market overall is down 1.9% today, but I can't see any obvious cause. Maybe just an overall correction to the rapid rise that has occurred recently.

[Yoda]

Suggest you monitor the world indices.

http://www.bloomberg.com/markets/stocks

mmmm.... cheers

[heisenberg]

No complaints at all... red days are great days for buying

[winner69]

Are you saying that AIRs SP will always be under pressure and the cyclical nature will never result in another period of 2.50 + in the next cycle? I am not trying to be argumentative, just curious to understand why you have that view. If I buy more shares at the bottom of the cycle and sit back on greater than 10% returns for a few years or more I would have thought this was a reasonable return.

I played trader for a while in the last few years and averaged 17% returns but still have thoughts the market is well overpriced and prefer to change my strategy which doesn't involve spending time watching it waiting for the next BREXIT or FED rate rise......

All that may (possibly) eventuate but that's punting / trading IMO

'Parking your money' in a stock to me is putting it into 'safer' / 'less risky' / 'non cyclical' / 'less volatile' stocks than what AIR is

However you have obviously made a well thought considered decision so hope it works out well. Each to their own but i wouldn't be 'parking' my money in AIR - i be watching like a hawk



Where is AIR in the cycle now? Maybe on the down leg - how would you feel in say 6 months time when (possibly) AIR is $1.40 approaching the bottom of this cycle?

[workingdad]

All that may (possibly) eventuate but that's punting / trading IMO

'Parking your money' in a stock to me is putting it into 'safer' / 'less risky' / 'non cyclical' / 'less volatile' stocks than what AIR is

However you have obviously made a well thought considered decision so hope it works out well. Each to their own but i wouldn't be 'parking' my money in AIR - i be watching like a hawk



Where is AIR in the cycle now? Maybe on the down leg - how would you feel in say 6 months time when (possibly) AIR is $1.40 approaching the bottom of this cycle?

Yep, its all taking a punt and going with what seems right at the time. There are certainly less risky and less volatile stocks but they also are all overpriced with PEs less desirable and if the house of cards falls there's some SPs out there with a fairly decent correction coming.

My anticipation is it wont get to 1.40, I don't even consider 1.60 a high likelihood but far too many variables to make such judgements. Long term with fleet age and the direction management are taking AIR I feel its a company worth parking some money in for a while. With the 35c divvy I am even at todays range in the green and thinking people looking for a return similar to me will be considering AIRs attractive divvy yield and SP a contender.

Thanks for that, I too hope it works out well.

[bull....]

if you don't have to sell it provides a good div yield at the moment and could be part of a diversified portfolio

[Beagle]

All that may (possibly) eventuate but that's punting / trading IMO

'Parking your money' in a stock to me is putting it into 'safer' / 'less risky' / 'non cyclical' / 'less volatile' stocks than what AIR is

However you have obviously made a well thought considered decision so hope it works out well. Each to their own but i wouldn't be 'parking' my money in AIR - i be watching like a hawk



[B]Where is AIR in the cycle now? Maybe on the down leg - how would you feel in say 6 months time when (possibly) AIR is $1.40 approaching the bottom of this cycle?[/B]

Hi Mate, I presume you have sold ?

Extremely unlikely in my opinion. Remember as we get toward the bottom of the cycle one can anticipate a dramatic PE expansion, (PE is presently about half its 10 year average). Even if earnings halved from here in future years, (going down to $250m before tax from mid point of current year company forecast $500m before tax for FY17), which I would hasten to add that no broker is forecasting it will get remotely that bad, even out to FY19, AIR's PE at today's price would simply revert to its 10 year average thus we would then have the stock trading at its 10 year average PE at such a deep trough to its earnings logic would suggest it would be very close to the cyclical low.

Logic therefore suggests that we will probably see PE expansion, not price contraction from here if earnings decline somewhat in FY18. I don't think analysts can reliably predict FY18 earnings this far out so their estimates and assumptions should be viewed in the context of how badly wrong they got them for FY17 until the company recently updated them.
On the remote chance we got down to $1.40 I would see that as a very special opportunity...one that only comes along once every few years and make an investment decision accordingly.

[winner69]

Hi Mate, I presume you have sold ?

Extremely unlikely in my opinion. Remember as we get toward the bottom of the cycle one can anticipate a dramatic PE expansion, (PE is presently about half its 10 year average). Even if earnings halved from here in future years, (going down to $250m before tax from mid point of current year company forecast $500m before tax for FY17), which I would hasten to add that no broker is forecasting it will get remotely that bad, even out to FY19, AIR's PE at today's price would simply revert to its 10 year average thus we would then have the stock trading at its 10 year average PE at such a deep trough to its earnings logic would suggest it would be very close to the cyclical low.

Logic therefore suggests that we will probably see PE expansion, not price contraction from here if earnings decline somewhat in FY18. I don't think analysts can reliably predict FY18 earnings this far out so their estimates and assumptions should be viewed in the context of how badly wrong they got them for FY17 until the company recently updated them.
On the remote chance we got down to $1.40 I would see that as a very special opportunity...one that only comes along once every few years and make an investment decision accordingly.

Those comments I made were about 'parking your money' in AIR not being a good idea. Now workingdad agrees that it's 'taking a punt' rather then safely 'parking' ones hard earned we are now both on the same page

Haven't sold yet - hoping that 196 in the bottom. Still about 10 cents to the good but dividend stripping hasn't worked as well as much as it was meant to - it wasn't really manna from heaven after all

That AIR cyclical chart still bugs me

[skid]

Are you saying that AIRs SP will always be under pressure and the cyclical nature will never result in another period of 2.50 + in the next cycle? I am not trying to be argumentative, just curious to understand why you have that view. If I buy more shares at the bottom of the cycle and sit back on greater than 10% returns for a few years or more I would have thought this was a reasonable return.

I played trader for a while in the last few years and averaged 17% returns but still have thoughts the market is well overpriced and prefer to change my strategy which doesn't involve spending time watching it waiting for the next BREXIT or FED rate rise......

That is a reasonable return WD--I think the debate is whether this is the bottom of the cycle or if there is still a ways to go--In this environment ,projected earnings can be missed--We just have to wait and see how ticket sales go in this new playing field.

In terms of dividends--They are only a return(17%) if that amount does not come off the share price after. Otherwise they are just paying you part of their value-(as WD pointed out he is still in the black though)-what happens in the future is any ones guess.

[Beagle]

"Fare" enough mate. On the divvy stripping thing...usually takes a few weeks and remember some of it happens prior to going ex, this time I'm thinking about twice that long due to its size. Market as a whole is down 2.6% today so no surprise to see AIR as a high beta stock down a bit more.