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26-08-2015, 09:12 PM
#1051
Hi NBT
AIA is a great monopoly business but it is not worth any price. People who bought it up $5.50 will take about 30 years to get their investment back. Morningstar who value businesses in a fundamental way put a $3.90 valuation on them.
Generally AIA will trade above most fundamental valuations due to the monopoly characteristics and NZ being small with limited high quality opportunities. I'd be happy to hold at $4.00 e.g. around 25 x underlying earnings (ignoring property revaluations). I'll wait until it makes sense on valuation and if it doesn't get there then I won't own it.
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26-08-2015, 09:17 PM
#1052
Originally Posted by nextbigthing
Would anybody who loves and holds this stock care to share your valuation with me? Not so I can pick holes at it, so I can work out how people are valuing it. I love the fact it's a monopoly with a strong moat however IMHO it's still WAAYYYY overvalued, it has a terrible earnings yield and that's not about to change any time soon! However the market seems to consistently value it very highly.
Please explain. NBT
Well I don't know whether this is any help,but yesterday I helped a friend organise his portfolio and his daughters' portfolios.
Daughters live at home and are handicapped.He is now retired.
His portfolio. Based on 2016 projections. Sell; AIA as yield is low[3.26%] and eps growth rate[9.3%] is under a third of the PE 30.5.
................Reinvest funds elsewhere ,SKL yield 7.47% eps growth rate 5.3% and PE of 10.3.He needs income.
Daughters portfolio.Hold as AIA is the NZ company with the biggest moat. Auckland Airport is the gateway to NZ.Traffic will increase over the foreseeable future.With AIA's massive landbank future earnings will grow.Dividend is not a consideration.Objective is a very safe loan term growth business.
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26-08-2015, 09:38 PM
#1053
Member
Originally Posted by Arbroath
AIA is a great monopoly business but it is not worth any price. People who bought it up $5.50 will take about 30 years to get their investment back.
You think it will take 30 years to get to $5.50??! But you're willing to buy at $4?
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26-08-2015, 10:10 PM
#1054
Originally Posted by vin
May get on board.. Definitely looking like some good buying opportunity
$2.50 is good buying at the next GFC.
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27-08-2015, 09:42 AM
#1055
I'm looking at both AIA and POT, both dividend yields are co-incidently 3.01%. PE for AIA is 25.31, POT is 29.11.
So in a game of would you rather, which one would you buy?
I believe POT has some good growth opportunities over the next 2-3 years so would buy POT over AIA.
Disc: hold POT and looking at buying more if there is a dip.
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27-08-2015, 10:10 AM
#1056
Originally Posted by Nasi Goreng
I'm looking at both AIA and POT, both dividend yields are co-incidently 3.01%. PE for AIA is 25.31, POT is 29.11.
So in a game of would you rather, which one would you buy?
I believe POT has some good growth opportunities over the next 2-3 years so would buy POT over AIA.
Disc: hold POT and looking at buying more if there is a dip.
I sold my POT shares a week or two ago,as I felt the eps growth would be modest,and was looking for a higher yielding stock.
Much as AIA is NZ's airport,so POT is NZ's port.
If you are not looking for yield I think both are excellent long term shares to hold.As you already hold POT I think you could add AIA.
That AIA land bank is very attractive.
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27-08-2015, 10:49 AM
#1057
Seems to be finding support at $4:85 this morning
11:22am going like a rocket... but can it be sustained?
Last edited by arc; 27-08-2015 at 11:27 AM.
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27-08-2015, 05:43 PM
#1058
Originally Posted by Cricketfan
You think it will take 30 years to get to $5.50??! But you're willing to buy at $4?
Cricketfan.
Theres a a big difference between $5.50 and $4. Eg 27% more value at $4. It's still a high quality monopoly asset so it is exceptionally difficult to buy such assets on the cheap. 2008/09 was that opportunity under $2 and a similar opportunity might not be seen again in AIA for 15-20 years.
To be precise at $5.50 AIA was trading on 37x this years underlying earnings and 29x including property revals. At $4 the metrics are 27x underlying and 21x after property revals. I think that is a fair price for the type and quality of assets they have.
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27-08-2015, 06:19 PM
#1059
Member
The Canadian pension funds were prepared to pay more than $5 even when these shares were trading in the $3+ mark, but the then labour government didn't allow the sale to proceed. Remember this ? I can't remember what year it was but it would probably be around 8 years ago ?
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27-08-2015, 06:35 PM
#1060
Originally Posted by limmy
The Canadian pension funds were prepared to pay more than $5 even when these shares were trading in the $3+ mark, but the then labour government didn't allow the sale to proceed. Remember this ? I can't remember what year it was but it would probably be around 8 years ago ?
Actually the Canadians bid $3.65 in late 2007 which the Government vetoed. That was after Dubai Aerospace had earlier bid about $3.80 I think and was also rejected.
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