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@curdas9, nice posts.
The problem with this board is a couple trolls are constantly deramping and instead of filtering and ignoring them, a few regulars constantly back and forth with them. The result is that the trolls keep posting and posting. Most people here are not negative about this company, most have invested here and believe it is a good long term, or maybe even medium term, investment. But the board is a mess, primarily because of one person who isn't invested.
Curds- You're a ledge! Silenced a troll and won an army of fans, lol.
Keep your posts coming for the following:
1 You know your onions
2 Well researched
3 Realistic
4 Language we all understand
5 Polite and not abusive
Basically what this board should be used for, of late it's been hijacked ( no pun intended)by trollers, abusive, aggressive people who seem to delight in sneering at others.
Thank you for bringing knowledge and sanity to this board.
FWIW- I bought in again at 2.35 a few weeks ago. Previously bought at 2.40 sold at 3.10.
If it goes low 2.00 I'll top up. ( I was out and missed 2.06 earlier.
Also - Chris England, love your optimism fella. Saw your post earlier about your health issues, hope you're well and safe.
GLA let's play nice.
As if by magic Curdas has silenced @mess lol
Some good points there @curdas... at last someone with positive view and information
I think you are all missing the point here. Obviously, the US and Latin American are the most profitable routes for IAG and these are also the regions most affected by the virus. However, someday (either in 2 months or in 1 year), these routes will be in operation again, either because there's a vaccine out there or because the cases in these regions have stabilized. The only thing we should be concerned about is whether IAG will survive until that day? According to the current stock price and the feeling among all of you, I would imagine IAG will definitely not survive until that day. But then again, you seem to forget IAG has plenty of cash to survive for the next year(s) and can raise additional funds if needed. There's a reason why they haven't asked any government bailout I imagine...
All of this to say I honestly believe the SP is way undervalued. I can see the price going a bit further down as there's a clear downward trend here, but not much.
And just a final thought - how can you explain Carnival's stock price currently being traded at a 67% discount vs. 20th Feb and IAG's stock price currently being traded at a 66% discount vs 20th Feb? The cruise sector, in addition to being the last sector to have customers, they don't even know when they will be allowed to operate (at least 0 revenues until October...).
Cheers and good luck all!
I've just joined this board to express my astonishment with all your negative comments on IAG. If I had seen this board before checking IAG's balance sheet, I'd have thought IAG was about to go BK. There's even one guy out there saying he's expecting the SP to go below 50p lol a stock that goes from 630 to 50 is definitely on its way to go bust, I wonder what's your reasoning behind your decision to buy it at 50p? Just let it break.
Fortunately, I looked into 2019 IAG's numbers in advance. The company had ~€14bn of debt, of which ~€11bn were lease liabilities. Lease liabilities are easier to renegotiate and therefore I believe IAG can delay their payments if needed. Anyway, out of €14bn of debt, only €1.8bn was short-term. IAG had €7.5bn in cash. The company's net debt to EBITDA was 1.4x. There is no covenant linked to the net debt to EBITDA ratio, so even if EBITDA goes to 0 there's no extra short-term payment kicking in. Looking at the balance sheet, it looks like a healthy company to me. On top of all these, IAG has a huge margin to raise additional cash if needed (I wonder why there's all that talk about equity when they have those cheap government credit lines out there?). Now, looking into the company's P&L, I see a profitable and growing company with revenues and EBITDA increasing at ~5% and 8%/year, respectively. Also, outstanding EBITDA margins of ~22% in the last 2 years.
Finally, looking to IAG's peers. Lufthansa and Air France for instance, as of YE19, Lufthansa had a net debt/EBITDA of 1.4x, a market cap of €7.8bn, a PE ratio of 6.5x, an EV/EBITDA ratio of 3.1x and an EV/Sales ratio of 0.4x. Air France had a net debt/EBITDA of 1.5x, a market cap of €4.3bn, a PE ratio of 14.2x, an EV/EBITDA ratio of 2.5x and an EV/Sales ratio of 0.4x. IAG had a market cap of €14.3bn, a PE ratio of 8.4x, an EV/EBITDA ratio of 4.4x and an EV/Sales ratio of 0.9x. Therefore, on a balance sheet standpoint, all companies had a stable leverage ratio. On a profitability standpoint though, IAG was the one with the best numbers and the best growth prospects, which was reflected in its higher valuation. As of now, the gap between IAG and its peers has been massively reduced - market cap of €4.7bn, €4.2bn and €1.7bn and EV/EBITDA ratio of 2.5x, 2.3x and 1.9x for IAG, Lufthansa and Air France, respectively. I could understand this narrowing if there was any short-term risk for IAG, namely bankruptcy or at least Chapter 11. However, as shown above, there's no short-term risk and there are plenty of different cash lines to be raised if needed.
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