AIR - Air NZ.

[skid]

"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.

Absolutely right--The market is definitely a big factor today,no getting around that--That always has to be factored in---its one thing that I find spooky about the ''buy and hold' strategy--The odds of the big one,however remote,have to be considered.---The pre market numbers are not looking as bad as before --still down though----of course Janet could fix all that,for now

[Snow Leopard]

Looks like there is a wee analyst re-rating going on:

2017 revenue estimate down to $5196m (from $5531m)
2017 EPS estimate down to 33.7 cts per share (from 47.8 cents / share)
Predicting further EPS drops in 2018 and 2019 (but then - who knows?)

http://www.4-traders.com/AIR-NEW-ZEA...07/financials/

12 month consensus now down to $2.20 ($2.10 to $2.35) and recommendation "Hold".

http://www.4-traders.com/AIR-NEW-ZEA...407/consensus/

Given that analysts are typically optimistic and slow in changing their (recently quite upbeat) estimates ... maybe a good idea to wait until this cyclical stock comes closer to the bottom.

Discl: not holding; DYOR;

Published figures show that globally RPK growth is now under-performing the long term average (short term now 4.5%).

US/Europe/Asia (x China/India) full service are sub 2.5% and even the Low Cost guys have seen growth declines (to 12% ).

More importantly ASK growth is running higher than RPK growth at about 7%.

This is currently manifesting itself as a large number of airlines offering really good deals.

So the analysts are currently more likely to be cutting rather than raising their carefully considered valuations.

Best Wishes
Paper Tiger

[simjp81]

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

Im with ya winner69. Dividend stripping has not been successful so far. Sigh

[thestg]

Im with ya winner69. Dividend stripping has not been successful so far. Sigh

It depends on how you do it. I bought 9221 shares the week before going XD for $2.27 & sold the day AIR went XD for $2.06.
Gross Return $2,439 = 11.62% (Cash return from div $960.00 & $1,479 to come from the tax man at tax time.) Also have to pay $30.00 on my loan interest which I paid back today. Also I have another 12,000 shares to sell (Which I also bought for $2.27 the week before XD) in about a month when the price settles. Hope it gets back to pre-XD price by then.

[777]

It depends on how you do it. I bought 9221 shares the week before going XD for $2.27 & sold the day AIR went XD for $2.06.
Gross Return $2,439 = 11.62% (Cash return from div $960.00 & $1,479 to come from the tax man at tax time.) Also have to pay $30.00 on my loan interest which I paid back today. Also I have another 12,000 shares to sell (Which I also bought for $2.27 the week before XD) in about a month when the price settles. Hope it gets back to pre-XD price by then.

Interesting. How do you get the total Imputation credit and RWT refunded by the IRD? If your income is low enough to get the RWT back then that is easy but if that low then you won't get all the imputation credits this year.


Disregard. I figured it out. Well done. You will be claiming the capital loss against your dividend because of your intention to trade as against invest .

Tongue in cheek smilie here>

[thestg]

Had to split the investment & buy most of this one on my wife's account. I think by the end of the tax year she will end up with carry overs.

[brend]

why does the chart look like this? odd buys and sells

Buyers

	Buy Quantity	Prices
2	24,544	$2.015
1	7,500	$1.965
1	50,000	$1.950
1	2,000	$1.935
4	63,000	$1.930
2	10,000	$1.920
6	25,670	$1.910
3	16,000	$1.905
13	116,930	$1.900
1	10,000	$1.880
34	325,644

Prices	Sell Quantity	Sellers
$1.795	5,000	1
$1.845	9,107	1
$1.865	10,116	1
$1.900	30,200	2
$1.925	10,000	1
$1.935	38,463	2
$1.940	218,535	3
$1.950	19,302	1
$1.960	4,247	1
$1.965	7,100	1
	352,070	14

[winner69]

Roger, I hear what you are saying about AIR doing to PE expansion and reverting to its long term average of 10.

However I point out that generally when AIR has an PE >10 is when profits are down the gurgler - like 2010/2012 period as per numbers below (from Morningstar)

Interesting their is a pretty strong correlation between AIR's EPS and the relativity of AIR's PE to the market (discount) - that correlation being >60%

In other words (historically) the more money AIR makes the more AIR's PE is 'discounted' by the market (and vice versa). Even the current 'discount' of 75% (AIR's PE relative to market's PE) isn't an outlier in the scheme of things

You are correct that as AIR's earnings fall the PE will probably increase - but unless they wipe out completely I would say that a reasonable PE will settle at between 6 and 8 (based on history) - a lot also depends on how well the NZX does or doesn't as well

We probably saying the same thing - you with some rnthusiasm but I am a bit more tempered in my expectations.

Main factor is that AIR is a real cyclical and to make matters worse a NZ cyclical so has that additional 'discount' to Aussie and global airlines. It really is a beast that defies logic

[winner69]

Jeez a close at 193.5 .... and the low for the day

Won't want another bad day tomorrow will we?

[workingdad]

Gee, look at that market PE...... good table thanks Winner