yeh i had a look at this yesterday. I read this page for the background Attachment 9383
Mackay looks to be a drag on passenger numbers
Cairns not growing sufficiently to compensate
They paid about $110 The asset is held at about $75m
I guess it makes sense to divest with the upcoming capital requirements for AIA but then when I think about it more, actually - money is cheap these days and they would appear to be getting a good return on their NQA investment.
Not sure what its worth is now -
good profit though,
As per many stocks there has been a nasty downturn recently and I bought more at close yesterday based on the exact 61.8% retracement
The opportunity cost would be to borrow the money instead and have interest charges through finance cost and additional liabilities show on the balance statement for a longer period of time. At the same time, keeping a less than ideal investment.
I like the sale being used to fund the current investments. I'm just starting to wonder if the sale is being used to fund rising construction costs, or that the capital allocation that was previously forecast was well below the real cost. The FY17 presentation had total capital forecast at 410-460m.
Here's some comparative PE's from other growth companies on the NZX, all growing considerably slower than ATM, all PE's off 4 Traders average of analysts FY19 forecasts
ATM 28
POT 36
AIA 29
FPH 35
AIA looking well priced based on this. (Apart from the fact that they're all expensive)
You need to consider their relative growth rates peat. Analysts on average for AIA are expecting an EPS growth rate of just 5% in FY19 relative to FY18 and the same in the subsequent year. I would say looking at that comparative ATM is genuine value on a relative growth basis as its growing much, much faster than any of those companies.
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
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Originally Posted by Marilyn Munroe
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