Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
To obtain income returns and a capital return for its Shareholders by acquiring, leasing and then selling aircraft.
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Https://simpleflying.com/emirates-a380-fleet-worth-10-times-more-any-other/
DNA 2 will close. The original plan for aa4 was to keep adding but I sense they will prolong the contracts but not add. But the Thai contracts are through 2035. There is a real chance of extending the EK contracts. Carcosa on Lemonfool - who has done some great analysis - thinks lease rates will be much lower going forward. That is not my experience and I would expect them to be lower than current but to provide a very good yield and much higher than in his modelling.
Andy,
Thank you very much for a superb reply! And do not apoligise over its length when it contained great, succinct info.
I will take a closer look at DNA2 but am happy with AA4 for sure (particularly, as you say, with the possibility/prospect of unlocking further income for dividends from Thai's emergence from bankruptcy protection).
On another note, and applicable to both AA4 and DNA2, what are the prospects of them adding further planes in the future to be leased out. I am sure this depends on the price/availability of an A380/dreamliner etc, financing costs, lease potential/agreements etc. But for those who have been here longer, would you expect AA4 (or DNA2 for that matter) to be on the lookout for such opportunity, or to focus on what they have?
Guitarsolo
Yes I own both. The dividend yield on both is similar and secure - Emirates is government owned and will not under any circumstances avoid paying their fees. DNA dividend is fixed - AA4 could increase by up to 15% of the leases from Thai prove to be paying on a more regular basis (so far looking good). DNA 2 value is primarily driven by the value that they will realise on their four a380s which will start being realised from the end of this year. There is really only one buyer at the moment - Emirates. This week Tim Clark (President of EK) said they would start retiring them from 2032 - all I read suggests that EK need to retain the A380s for as long as they can. That implies they would either buy them for spares (like dna1) or create a new lease and operate them for a while longer. I have a view that the value will be at least the current price with a possible 30 - 50% upside. AA4 has the additional complexity (and value to unlock) of the contract with Thai. The investors (like Metage) have investment theses that this value will be unlocked. AA4 has high yield, minimum 6 years and possible 14 years of dividends at high level plus much more likelihood of unlocking value through buy backs. So dna2 likely to realise value sooner but aa4 more interesting for me. Simon Thomson article on aa4 had some (optimistic) values for a380 now, but the crucial item will be what will the value when the leases come to an end. The current value of assets appear overstated (I don’t think the current NaV discount is as high as in the books). But with each year passing the number of shares is now being reduced and therefore the Nav per share is increasing. And each buyback will increase this. I had an equal weighting on dna2 and aa4 but have been shifting into aa4 as I think the dividend will go up, the possible capital return is higher and the compounding of 16% a year (plus consolidation) is impressive. I have 45% return pa since I started on this track with AA4 and I think the above average return will continue. So I have concentrated quite a lot here and watch it very closely. Sorry for such a long reply - but it’s a really interesting one. DYOR, IMHO etc. best regards!
Andy,
Am I correct to think you own both of these aircraft leasers? If so, are you able to explain the differences/ similarities?
Do you invest in both to simply spread the risk, or do you prefer one over another?
Best regards,
Guitarsolo
Mmm - maybe that was my point….
Yes...because it's now at 49.60
UT keeps being “interesting”
It is now being covered under Seeking Alpha.... getting some US coverage as well under AMDOF
Believe this is a hidden Gem at this level still )
This looks like it is walking up slowly these last couple of weeks. And a nice spike into closing. Wonder if anything is coming.
Have been a steady regular buyer, in small daily size, every down/flat day for last few weeks. Looks a classic recovery play with strong fundamentals and a cracking dividend. More than happy if this plods away at circa 1-2% each week as it seeks to close the discount to NAV and receive the divi whilst waiting
I see it’s in Alpha so paid for - not something to post. But in summary he describes a certain risk (travel/Covid) but a very good opportunity to have both 16% yield and 60p plus per share.
Interesting! Can you post?
Thanks
ST recommended these in today’s Alpha article, reads well, I personally wasn’t aware of them before, happy to see you’re invested here Guitarsolo.
I’ve picked up some mainly for the dividend income.
Https://mediaoffice.ae/en/news/2023/May/11-05/Emirates-Group-announces#:~:text=Group%20revenue%20of%20AED%20119.8,(US%24%2011.6%20billion).
I have done the same. Time for them to compound....
Thanks for the heads up Andy! I too had sent HL a message so it is good to see the restriction has been lifted. I have replaced the shares that were consolidated and continue to slowly build a position.
All the best.
I spoke to them last week and complained that i could not reinvest my dividends. They wrote back today and said it was fixed, so I tried and it works! At last....
By the way, a few thoughts. After the consolidation the NAV per share is again improved. so the discount to NAV is becoming even more significant. I am anticipating an ongoing increase in dividends (as are forecasters in general). The black swan even would be a new halt to travel - but the next couple of years look very strong with Emirates in particular but Thai is in much better shape. And the resale value of aircraft appears to have reversed from continual down trend to an uptrend. Feeling very positive about this share
you are right - it is a bit of a shambles
The KID is there, but I still get the following message if I try to buy on HL:
"This stock is currently unavailable to buy. Regulation requires HL to display information about costs and charges, but we don’t have access to this information at the moment. You can hold or sell any existing shares, but you can't currently buy more. We're sorry for any inconvenience."
Are others successfully buying?!
At last - that was a long time!
in what way?
The return terms at the end of leases, with Emirate`s are interesting :D
Have you researched the expected residual value of the fleet at end of leases having regard to likely hours run? If the answer to this is yes but 'not a lot' then have you calculated the possible revenue stream based on current revenue rates and hours?
It is great having a nice running yield but if one is effectively being repaid capital as part of the yield it might not look so great on further analysis.