Member Info for valuewalk

I should have known that. HeresHopin you are a better man than I am, Gunga Din.

I wouldn't be surprised if a lot of the shorters have taken their profits, minuscule as they will have been compared to taking a long position. What's happening now looks more like genuine traders panicking, stop losses getting triggered etc.

I'll admit I don't know the end of that quote, mainly because I heard it on The Sopranos and the fellow saying it got six bullets in the chest before he could finish. But, I suspect it went along the lines of cooler heads prevailing.

I don't know what is going on, mainly because I rarely look at prices the way I am with Flybe, but I do know that the fundamentals have not changed. I do know that nobody is going to sell out at 10p or even 20p. I do know that Flybe has enough cash to last a year (even on the VERY pessimistic view taken by The Telegraph). I do know that at 8p it is even more grossly underpriced than it was a couple of days ago. The IIs are selling because they always panic sell, they just s*** themselves at the prospect of any loss and they bought in at much higher prices (by and large) than most of us (if you bought in at 150p a share or whatever then the difference between losing 142p and 150p would mean, to a rational person, that you just held but they are forced to account to bosses).

ANYONE selling now is a prat. ANYONE. They are throwing away profits, and if they don't realise it they should not be in this game. I suspect some panicky types put sell orders on at 8p, 9p etc more fool them.

They CAN'T pick it up for 10p, because not enough people would agree to a takeover at that price. Worst case now is going from 8p to 0, no major holder is going to sell at 10p- 30p maybe, 50p probably, any more, certainly.

No need for them to do that. They have £50 million, oil prices are dropping (and they DO have exposure, despite scurrilous suggestions to the contrary- it's a fact) and the Pound will strengthen. Whether or not they will increase capacity such that they need the Embraer's, who knows? It also doesn't matter, they have the turnover, they just need a little wind beneath their wings in the form of reduced costs (jet fuel).

Carbon emission costs have been raised as a distraction too....they are rising for everyone, not just Flybe. In the end they will get priced in, people are NOT going to stop flying because of them. Domestic flights, some would argue, are more of a choice than international ones. This is true, but in some cases they are cheaper than alternatives (London-Glasgow can be cheaper than on the train) and they will rise in popularity because the UK is so crowded now that roads/trains for proper long distance is often a daunting prospect.

I'm probably going to put a limit order on, to buy another 500k if it hits 3p a share. Now that COULD be a hundred bagger given enough time (I am talking years to reach £3 a share, mind). But I see it as a guaranteed ten bagger if it gets filled. The BEST THING that could happen is for the shorters to overegg their pudding and get it down to sub- 5p. To make any money on that will require them to do it on a massive scale, we buy and kill them with a short squeeze. If I were into shorting and all I was making was a MAXIMUM of 5p a share I'd want to short quite a few million of them....big problem if it hits £1 in a squeeze though.

And even if the squeeze doesn't come (let's be honest, volume is pretty high so they can probably exit, if they don't panic, without getting slaughtered completely) I see that 3p definitely becoming £1 within a year.

What I suspect we will see now is the hedge funds moving in, they are going to look to block a bid, collectively, OR hold the buyers' feet to the fire. There is an educated viewpoint which says, given what happened with Stobart, buyers won't be extorted....in which case it is still an excellent value play, you're getting a potential £500 million + company at a valuation of £20-25 million.

Nobody has disagreed with me on the fundamentals, which leads me to believe the naysayers just have almost no appetite for even minimal risk, even intelligent risk. Fine, the bond market may be more to their liking. But plenty of players, i.e. independent traders and hedge fundies (whose clients are, as a rule, pretty hands off about what they do- and who don't need to worry about the red tape proper institutionals do), will see this as a potential long-term 2000% return. Even if there was only a 10% chance of that happening it would be an INCREDIBLY mispriced opportunity. I think there is much more than 10% chance.

None of this is untrue, it's just that the fundamentals have not (to the knowledge of any of us) changed. I mean, they have the cash to keep trundling along no problem, some macroeconomic factors are in their favour. They are still, actually, profitable. Their debt is manageable.

If nobody buys them so be it, we will wait a little longer. But this company is grossly undervalued. And 'savvy' institutional investors are just as likely, even more likely perhaps, to make a pig's ear of analysis. They HAVE to take a view, none of us do, we are trading with our own money and can say no to a thousand stocks if we want to.

I'd listen to an experienced individual trader over pinstripes any day.

Do people seriously think they won't get the $70 million? $70 million makes no odds to the Indian government, and, though I am not privy to the contract, it is highly likely that the figure due is growing with interest payments. I am considering putting £10k into this, I could see £0.50 a share just on some news of the award being paid.

Even if they decide they can't collect the award for themselves....ever heard of Paul Singer? The Indians, unlike the Argentines, are actually solvent. They could transfer the award for $20-30 million quite easily, then the well-connected hedge fundies use their army of lobbyists to persuade the foreign government to pay up. Easiest way to transfer such an award? A takeover....given it is probably not assignable under the master contract (guess). What's $30 million? £0.40 a share or so? An eight bagger more or less.

They are spending £100 million a year, near enough, on oil. Let's hypothesise a 30% drop in oil prices and GBP/USD at 1.45. Now they are spending £65 million a year- so £35 million from that alone. That is without any real structural improvements. £35 million is also 50% more than current market cap, oil based profits in a single year....

Just noticed, remiss of me as that is, a key point in yesterday's report somehow overlooked by me until now. Between March and September, thanks to a drop in oil prices and currency strengthening, the value of their derivatives has increased by £17 million...

The Embraer purchases could, at absolute worst, cost us $22 million in cancellation fees. I don't think it will be necessary to cancel all four units, and the overall charge of $114 million assumes no discounts are received (if you buy four you should get a discount, aircraft are quite heavily discounted). Furthermore, as the Pound strengthens Dollar expenses mean less to worry about.

£1 a share if no takeover.

Doesn't matter too much. 90% commitment means a 10% exposure, which still adds up to many millions of pounds a year for an airline. It could mean £10 million probably, which would be a portent of what is to come when they lock in prices next year.

Their EBITDAR is £80 million for the HY to yesterday....on revenue of £408 million. So they are spending £328 million on something else, a fair bit of that will be on fuel. A small movement of the dial in their favour will buoy them incredibly, as I said, profits for 2019 eclipsing the current share price are quite likely....it screams buy even if you are cautious.

You won't get a better risk/reward ratio than you will on Flybe. Even at 20p a share it's a solid buy.

Yeah. We don't need a takeover. We have £50 million in cash, something people are forgetting. Left to our own devices our profit next year could well eclipse our market cap at the moment, so we'd be looking at 1000% growth no trouble.

A takeover is just an easy exit for us.

It's a question of risk though. Directors were buying in at 30p, they will never support a sale at 8p. I reckon 30p is about the limit for a takeover, and restructuring won't be necessary, some capital injections may be but not proper restructuring a la a CVA. Anyone who buys Flybe for 30p (£75 million) is getting an ultra-leveraged play on oil and cable, with the market fairly optimistic on both I'd say they are getting a steal.

If demand were dropping precipitously I would have a different view, but the truth is revenue of £750-800 million means that just a slight wind behind their sails on jet fuel prices and/or currency will generate a £50 million profit....if you can get back 2/3rds of your money in a year you are on a winner.

I call a PE group buying it, not an airline. I reckon they will pay between 30p and 50p a share. I suspect they will dump enough money in to ensure further debt is not needed (because any debt issue could be on unfavourable terms) and wait for oil price drops to be reflected in the bottom line. Then after five years they will IPO at £500 million or more.

Arbitration awards are much more solid than most people believe. Thanks to the New York Convention they are much more enforceable than court judges. I would much prefer to have an UNCITRAL arbitral award, for transnational matters, than a High Court of England and Wales judgment. If you, as a country, don't enforce arbitral awards you will find yourself shut out of world trade....the death knell for any economy, never mind one as big and desperate for growth as India's.

Over $70 million, which has been awarded, it just seems unlikely the Indian government won't pay. I suspect they are trying to squeeze Hardy a bit and reach a compromise. $70 million means a HUGE amount to Hardy, at its market cap of £3 million and cash position of $9 million, but it is sweet FA on world trade.

Expect, in my view, posturing and timewasting from the Indians over this. I suspect they will quietly pay up after going through the motions. Courts in India are notoriously backlogged, this may jump the queue but expect a wait.

I am content to count the $70 million as an asset, and run the risk that my view is wrong. They have $9 million and NO debt, they also have a defunct business model....the defunct business model, of high cost oil producing (relatively) would put me off if they did not have a cheque for almost 20 times their market cap in the post. For all I care they can stick the $70 million into an index fund when they get it, we'll be up 20 fold and the rest, as they say, would be gravy. In fact....the way oil is going I'd prefer they DIDN'T put the bounty into oil.

Carillion was in an incredible amount of debt, Flybe really is not. Debt kills in the end, no debt no problem. One good year and they could clear their entire debt. Carillion could not have said the same. It's just apples and oranges.

The amount of desperate shorting on here suggests this is now a strong buy, even they must suspect something is afoot to be this bothered. Look, if I were shorting and I truly believed the IPs were about to come in and tear it apart, I would be silent....let the price go up and short even more, more profit.

Their desperation is because they have a lot more to lose than [most] of the longers. I was in at 11.5p or so, averaged out over two transactions. Worst thing that happens is I lose what I put in. For them, if they shorted at 11.5p and it hits 50p they're looking at losing four times what they could have, on a best case scenario, made. That is why they are panicking about the open tomorrow.

I have been looking at Alba, with a possible view to making a purchase. I think it comes down to the truth about the fundamentals of, pretty much, every natural resources company. On a standard analysis they are undervalued, because you can have X billion worth of oil, copper, silver or whatever but if the market is not in your favour and it is uneconomical to extract then it is cashflow worthless.

They are saying $25 a barrel to extract at the Gatwick site. Even at $40 a barrel that is a decent margin, with room to grow if oil prices shoot up (doubt they will any time soon). The Greenland discovery unsettles me a bit, the saturation levels for all of the minerals were, to say the least, a lot lower than you would see elsewhere in the world. I'm sure Greenland has its advantages, it is stable politically for one thing, but it is also remote (granted, gold and silver are not bulky or troublesome to transport- but you have to look at the employment side of things).

I would view it as a buy for the long term proposition, like many natural resources companies. A spike in the price of any one of their commodities could lead to a nice ten bagger, or better- and it's worth waiting years for such a result. It has what I call 'dormant value'. In the here and now....I'd say it's about where it should be.

*Meant to say, much more price conscious than Flybe. Flybe is not a particularly 'cheap' airline, it just has a stranglehold on the domestic market. Which is a nice position to be in, all else being equal.

It doesn't even matter whether anybody wants to buy them, it will be better for us if they don't. Flybe, properly organised and run (which is a qualitative judgment by me of the management, I accept), with a little wind behind it, is capable of producing £100 million a year profits (13% margin). Consider that Ryanair and Wizzair both operate on net margins of 15% or so, and both are, in my experience anyway, much more cost conscious than Flybe. Yes, Flybe has suffered because of its Sterling focused pricing- but it is still a viable business.

£100 million in profits would 'justify' a market cap, in heady conditions such as these, of £2 billion probably. Or £8 a share. As I said before, if we get bought out at 30p we will be trading momentary relief and minuscule profit for what we're all after, a serious gain. I won't hold out for £8 a share, at £2-3 a share I'd be gone I suspect, however sunny the sky may look, but it's not ludicrous to suggest, long term (not on current fundamentals, I hasten to add), we are looking at a company selling for about 1.25% of its value. It's not necessarily going to happen, it's just not impossible.

This is why I have so much confidence that buying was a good move.