Member Info for RogueRiver

Wincanton and Clipper are very different beasts. Clipper specialises in e-fulfilment, which, given the continuing rise of online retail, is very much a growing sector - hence the growing sp. That said, I think we are probably approaching the limit of Clipper’s sp growth for now, though I could see it hitting 750p next year.

Plenty of volume today. Long may it continue.

Bit of a delayed reaction though. Either someone is a very slow reader - or the selling has little to do with the update.

It only takes a positive tip on a news/finance site to send volumes soaring. It has happened before and doubtless it will happen again.

@SMAT19

I am interested, but not at current prices. The sp dipped as low as 174.1p intraday last week - still too high. IAG is priced for a return to something approaching normal operations this summer. It is now pretty clear that is not going to happen. The sp needs to reflect the new risk outlook..

Negative story in the Sunday Times about business air travel being permanently cut back and one in the DM about heavy restrictions on overseas travel probably remaining in place until late summer. I wouldn’t touch IAG shares with a barge pole at the moment. All I can see is the debt pile growing, while the overseas travel market will continue to be depressed, thanks to a combination of onerous restrictions and airport chaos, for the rest of the year. IAG’s survival is not in doubt, but it is going to be a very long slog back to profitability. I think we will be lucky to see the sp in the 130-150 range in H2, during which IAG will probably issue some pretty sobering guidance.

IAG certainly has the commercial heft and cash-raising power to keep its head above water until it can resume something approaching normal operations. Unfortunately, it now looks like summer ‘21 will be a write-off and the debt pile will be higher. The sp needs to reflect this new reality. Sub-150p is probably going to be the norm for H2.

@Carondean

Thank you for your interest. IAG was one of several holdings I added last year - mostly financials and industrials, which are now doing extremely well thanks. I generally avoid trading, but the case for holding IAG was becoming less compelling - so I sold (at 25% profit). I will probably buy again, but only once IAG is sensibly priced for the revised risk outlook.

Current valuations were based on a return to something approaching normal operations by this summer. That was my expectation too, until recently. Given recent developments, that now looks hopelessly optimistic. There is no question that IAG will survive, but the path to profitability has probably been pushed back by a year or so. That is going to mean more debt. If you intend holding long-term, none of this really matters. Just look away and wait a few years.

Pros:

Well managed company with valuable brand image

Effective cost cutting continues

No problems raising additional capital

Pent up demand for overseas travel

No transatlantic competition from Norwegian

More fuel-economic fleet

Cons:

Mooted disposal of Heathrow HQ will reduce BA’s profile as global brand

Third Covid wave across continental Europe now making summer 21 air travel reboot doubtful

$1.2bn bond issue will add to debt pile

Strike action by Heathrow workers in prospect

Extra admin at the border may further deter air travel this year

Further capital raise next year looking more likely

Norwegian Air founder backs new long-haul, low-cost airline that will fly between Europe and the USA

Rising fuel costs

I think the cons outweigh the pros at present. I think we will see a steady (then possibly more dramatic) correction in the next few months. I certainly would not rule out 150p as an average for H2 and I don’t think we will see 250p until mid to late 2022.

Another $1.2bn of debt in prospect, continental Europe is in the grip of a third wave, Heathrow workers have announced strike action and extra checks at the border are already causing chaos, with very few people flying. I fail to see any grounds for optimism here. The summer travel reboot is looking decidedly shaky and I think another capital raise will be on the cards next year. I’m amazed the sp is still holding up and I think a correction is due.

Looks like Standard Life have upped their stake in Clipper - now over 5%, which may help to explain recent gains.

Despite the optimism here, I have turned very bearish about international air travel this year. If restrictions due to a third wave in many countries do not get you, then chaos thanks to all the extra checks and admin at the border probably will. Travel insurance will not cover you if you need to quarantine. Even if the adults of a family have been double-vaccinated, the children will not have been. How is that going to work? There are just too many unknowns. I think this year will probably be a bad one for IAG, with summer schedules being severely curtailed. I fear the next update will carry a warning about the prospect of another capital raise being necessary - causing a severe rerate in the sp. That’s just my take though - gla.

Nice to see it back to pre-pandemic levels. Still exceptional value, given the divi.

I can see the sp breaching the £1 mark, once the dividend payments begin later in the year. Meantime, it will probably continue bouncing in the 86-96p range.

Heavy selling in the run up to final results day doesn’t exactly fill one with confidence. Fingers crossed.

Topped up this week. I think we will be back in the 600s in no time. I have been very tempted to trade, but I am just going to hold long-term. I think Clipper will be a solid dividend payer for years to come - and I think the sp still has plenty of capital growth left in it.

Fingers (and everything else) crossed. Should really have broken 3p by now.

Good old PPC. Still dragging its behind as the poo rockets.

Certainly a very rapid and ‘random’ spike.