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i've been saying this for ages. Everyone knows US equities are way overvalued from central bank activity and needed a big correction. But the FTSE not so much and IAG not at all.
And in terms of growth stocks, when interest rates rise then these are less valuable as their SP is based on future income way in the future but discounted. So as rates rise you see big drops in tech. I know IAG needs to pay back some debt first but stocks like it, but if it is in a very different boat. It's not a defensive stock since air travel suffers in recessions but it's also not a 130p stock. It's a stock than isnt going to "grow" in 10 years time but will recover in 10 months time so it's not comparable to some of the US equities dropping recently. But its getting dragged along for the ride as happens in these situations. Once the situation becomes clearer and IAG starts making profits again, people will see it very very differently and I believe suddenly. I could see this stock going on a bull run after next quarters results.
woody2002, agreed about the US tech stock. So over valued, like a giant bubble that has now burst and still has a way to go down. Not necessarrly Apple, or MSFT but EV car makers and others that made no money yet valued more than money making companies..
Problem is, the young tech orientated people got burnt and will be for the rest of the year.
I think US tech was overvalued, I don't think the rest of the market especially the UK was. PE ratios are pretty decent atm. Even tech stocks can now be valued appropriately.
Growth stocks are probably becoming opportunities again
Jtan
Thanks for post yesterday 1020 :))))))
exactly correct. forget the short term as markets generally are overvalued
wait for this to be in profit and it wont be 1.30 but 2 ish easy
I would think it will be at least £2.50 in the next 3-4 months. Oil price is high but see.the results. Whatever it's a long term investment that is currently undervalued. Divis back on the cards
By early winter I suspect trading price range 1.45 to 1.60 ish!!
Hi lloyds
Agree with most of what you say except BA doesn't have any 747's and fuel is hedged for next 2 years (although normally its 6 -12 months). So fuel shock should be minimal.
As previously posted and I think accepted wisdom, the SP is not reflecting any thing like the potential of IAG, it is much lower compared to many of it's rivals despite having a very solid business model and that is down to market manipulation and sentiment...
I've just sold a chunk bc it's friday with the expectation this will go lower and will then buy back in with that dry powder. But I am holding more than than my dry powder reserves so its pure speculation. Of late the SP has rallied on Fridays when it normally falls so given I'm predicting a fall you can bet the opposite will happen!
GLA and have a good week end...
Monthly numbers really jumping too. Be interesting to see what May numbers are for Heathrow:
January 2022 2,598,556
February 2022 2,863,496
March 2022 4,196,656
April 2022 5,081,426
Compared too;
January 2019 5,927,543
February 2019 5,482,288
March 2019 6,527,489
April 2019 6,798,212
Can we reach 6m ? Possibility in my opinion.
Many colleagues I know who are flying in and out of Heathrow have said they have never seen the airport so busy..
Time will tell whether that is based on passenger numbers or the airports not being organised enough...
People are back flying as most of us knew we would. Won't take long now before recovery starts to reflect in the SP
sundezema: i'll put in 132 max and 129.00 close. Sorry but we usually have to 'pay' as bobbins2 may echo for any jumps of liberty from the 'bot masters.
It will be a very interesting day - 1) More share b/bs, a 'natural market lift on improved covid outlook and congenitally wobbly Friday markets also. Rennies at hand. GL
(Blue Nun and Viscount biscuits waiting for 130 though).
I think markets want to head higher today to close a good week....after 8 weeks in the red. I think we will head towards £1.36 next week. Plus, no IT failure today, only a tonne of flights full of holidaymakers and businessmen....could we be carrying a tonne of passengers?? likely!! Hope the dogs on the BA286 yesterday are ok..DYOR.
£1.289? Kidding - got no idea, but if we could maintain about £1.30 going into the weekend, it would be a small step in the right direction.
any predictions for today anyone?? And I mean anyone!( OK....not the derampers please!!! and no predictions lower than £1.288!! anyone??
US GDP is what it is and it's already factored in...not great but its known. AC , just enjoy the move UP..its nice to see green..we need more of it and in a burst!!!!
The IAG share price met our expectations of a breakdown from the rising wedge pattern. This breakdown move is currently testing support at 124.48 after the bulls strongly resisted the breakdown of this level with the 19 May hammer candle. The intraday uptick needs to close above this price mark to preserve 124.48 as a support. If this is successful, the bulls would need extra momentum to target the 136.64 resistance (3 December 2021, 10 March 2022 and 12 April 2022 highs). A further break of this level gives the bills access to a harvest point at 143.94 (31 December 2021 and 22 March 2022 highs) before 149.72 comes into the picture. Additional upside targets at 154.78 (1 March and 22 April highs) and 167.54 remain far off.
we should be going towards £1.30 now and probably above...as markets reacted positively to the FED last night.
Summer is also here and flights will be picking up in June. Enjoy the move NORTH.
Lloyd's wasn't oil hedged for 2 years? At 60%
I did not believe Putin would be such a fool as to invade and all hell broke loose. My plan was to run a short trade for a few months and sell in the 180-200 range which would surely be here by now but for his madness. Unfortunately now the correction to equities generally is upon us but we have nowhere to run and must wait it out. Fine, its not nice but nothing lasts for ever. Give it 6 months and it'll make more sense in perspective and youll have a crappy story for down the pub for anyone who wants to listen
Few bits of realism.
1)Oil prices are hedged but only for 6 months. The best estimate of current oil prices is the futures price and so back of the envelop calculation says 100p average price is 50% higher and fuel costs on a 747 are substantial. Having said that, I believe these will come down for a few reasons. Yes IAG can pass onto costumers to an extend but its not good for the SP is it?
2)Interest rates increasing is a drag on earnings since debt is higher than equity in the chain and must be services first. Not to mention it makes bonds worth holding more vs equities
But overall I agree this is way oversold. As I said many times IAG is not like the general equity market. Nobody can look at the US and say without looking like a fool that it wasnt/isnt due a correction. At year start it was 40% higher than it was in 0320. Why is that then? Could it be the massive central bank action taken ! Guess what happens when they start to take away the punch at midnight. The FTSE is less extreme at just about where it was but still it doesnt make sense does it to say that the UK economy is just as good as it was then when it just isnt + with rate rises and austerity to come.
But IAG is not anywhere near where it was but actually 10p lower than 0320. Why? Planes were grounded then and the end of the world was not unrealistic, hysteria roamed. Sure debt has risen a bit and fuel is higher but the current SP doesnt add up at all even at the most back of the envelop level.
Company needs to give investors something to go on. So far its been promises of recovery and not a lot happening.
Traders might use the additional volume to drive this higher short term.
Isn't the ftse made up of energy and mining stocks? Thats likely why the entire ftse is holding up. If commodities come down ironically we go up , maybe...
We've held 120 quite well. Its maybe over sold and we're just being kept down now. He says with hope
Likely stock will rebound, there will be short lived rallies but overall destination is south, with the rest of the market.
Nice little push going in now hope it holds
Average Down to 128. Very happy.