The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
I think they're opening investors to the possibility of it and soften the blow if they do . Just whether they use the capital they raise responsibly for smart/planned out expansion or whether they need it to protect themselves or non-smart planned out expansions.
US indices powered higher to start the new week as investors look ahead to tomorrow's FOMC decision where a pause in the rate hiking cycle is widely expected. The Fed has delivered 525bp of rate hikes in a little over a year, now it will settle into a "watch and wait" pattern for at least a few months as the impact of the 5.25% Fed funds rate works its way through the economy. Today's main interest will be the CPI inflation print for May, the core CPI inflation reading is expected to ease lower to 5.3% yoy, still way too high, but at least coming back down. Today's print has potential to impact markets in either direction, but with sentiment so upbeat at present, bias is probably for more bullish market action with the main event of the week still to come tomorrow.
To be paying dividends would be more than likely seen as financially irresponsible and that IAG do not have their priorities right. The companies ability to be able to comfortably pay a dividend is what will add value, but that's long way off atm and price will trend upwards as its financial position and retained earnings strengthen. If you're looking for a short term pocket rocket I would focus on short-term impacts and sentiment as airlines can be very good for trading volatility.
Primary concern with Tesla's I have is the ability to track wherever your vehicle goes and the ability to shut down your vehicle remotely. I'd invest in it to be the next data company like Facebook. Hydrogen and possibly some other EVs seem more appealing.
Going forward I am optimistic, debt I am hoping has reached its peak now they have ordered all their new aircrafts and generating profit. New debt required should be minimal or strategic based rather than survival.
Jet fuel is now hovering around its pre-ukraine war level, if we can maintain this or have a further drop we should have a lot better margins this year. As that's what skimmed 2022s profits and the omicron variant scare at the beginning of 2022.
Flying pre-covid now no longer has the same meaning (assuming they can maintain it) As someone said before they have wafer thin margins likely due from increased costs and debt repayments. The result of the lower contribution from flights towards fixed costs/overheads means they need to exceed & maintain pre covid levels to achieve pre-covid profit levels.
Although there's certainly room from growth/recovery £3.50 seems pretty optimistic 12 month target considering the completion different financials they now have and dilution of shares through RI
In terms of dividends I've seen a lot of people thinking the conditions imposed from the pension deficit regarding dividend payments meant they were or likely to make a payment. It would've have been a lot bigger news if they had announced they would.
There's been plenty of buying and selling opportunities. If you are wanting this to skyrocket to the moon as a covid recovery play then I think you may be waiting a while. IAG since their major halt in being able to fly planes, as I am sure everyone is aware they have amassed a big debt pile and have very tight margins. As previously mentioned by someone else if their net profit for the year in 2019 when they were flying at somewhat of a normality was roughly 1.7bil and they have 30bil+ in debt plus new debt they take on and rising costs this isnt going away overnight or over next few years.
As an avid gambler, when you are up take profits (be it 3,5,10%) as the odds are never in your favour and letting your money ride it is more likely to lose in the longer term.
People are caught up in wanting to see one big number. its way easier to achieve that number through lots of little wins imo than hoping for one big one.
My advice if you are a long term holder, check the price now and then and watch your money appreciate slowly over next few years (although their are far less risky companies offering better upside potential in the longer term - this is an Airline after a pandemic and huge shift in wealth). If you enjoy that up-down rush then its far more profitable to trade this shares volatility.