Member Info for valuewalk

I actually joined specifically to comment on this, because I saw quite a lot of stuff I believe to be untrue being said. And today has been an exciting day, should have been much more exciting actually. It seems most people on here, actually, are in broad agreement with the idea that Flybe is undervalued, severely, which makes it all the more strange that the price has not really reflected that.

I agree, some trickery is afoot by shortsellers/takeover artists.

I'm not overly worried about how many shorters there are, although a short squeeze would be lovely because it would mean booking a good profit sooner than anticipated. I think the fundamentals are in line and the company is undervalued, quite severely. I could be wrong, but I'm 95% sure I'm not. Their cash alone exceeds their market cap, anyone shorting it on its fundamentals is a nutter- if they shorted at 40p and got down to 11p good for them. Hence, I am happy to take your word for it, I was postulating that this activity might account for the price suppression we have seen today.

Well I'll take your word for it. But if I were in their shoes I would not be holding out for another 25% when the fundamentals are where they are....never mind when takeover rumours are floating about.

I think this is what's going on, frankly. As someone said, they want to keep the price low for any takeover to limit their losses.....think about it, anyone who shorted at 20p or above will have closed out now. It's the ones who are trapped who will be suppressing the price. Deeper and deeper hole comes to mind.

Is anyone considering options on this? I'm thinking if the stock is so underpriced, perhaps a 20p call would be worth a punt? I haven't checked, and usually avoid derivatives of any kind, but I'll eat my hat if we don't see 30p at some point in the next month. And I'm happy to put my money in my mouth before any hats go in.

We don't know who the buyer is. Someone sold 500k in a single block this morning, which suggests shorting to me. I am probably not the best person for a day trader to listen to, because I (hence my name) look at intrinsic value, albeit with a dash of optimism or pessimism about macroeconomic factors (in this case optimism, over Sterling and jet fuel). I don't mind waiting a week or a month if it means a 200% profit, if you're in it to make 10% today, the way things are looking, I suggest you'd have more fun taking your money to a casino and Martingaling some blackjack.<br /><br />I'm not going to increase my position at this point. I'm happy with 80,000 shares. So I won't be contributing to upward momentum. I suspect, as we near the close of play, a lot of short-term guys are closing out positions taken during the bumpy ride this morning (while I, as a value investor, was still pleasantly snoozing I might add- got £3,200 richer and then lost it before I was compos mentis).

Yeah it was like a cryptic message. Our LOSSES (actual not losses, just depleted cash, but that's accountants territory) were due to (quiet whisper) lower Sterling and oil prices......yes, the two factors which are likely to turn in our favour. If I see a management buy out on this after that I'll feel crooked.

It is worth 50p a share or more in its current condition, considering market frothiness (which you should ignore in my view anyway). It is suffering from being unsexy and from the Brexit hysteria. Ironic really, considering it does all of its selling in GBP and much of its buying, fuel aside (which is dropping as we know).

They have a small amount of market exposure, 10% in this case. Historically (I'm talking 08-14) it has been a bad idea because oil was very expensive, as we all know. In this case, Brent is down, WTI is down, everything is down. Forget the spot price, whatever they are locking in now will be much cheaper than they have been paying over the last 12-18 months.

Be fearful when others are greedy, and greedy when they are fearful. I have my position in this now, and I'm down a notional £200 or so on 80,000 shares. I am not in the least bit worried. All I/we can do is look for bargains, sometimes you get a pig in a poke but I highly doubt it in this case. If I had £50 million I would buy Flybe today, and laugh at how cheaply I got it. A 15% drop in jet fuel prices, a 10% rise in the Pound against GBP and I'd have my money back in a year, and a free airline to boot.

I'm looking for a buyout at 30-33p, worst case, or, better yet, a rise to £1 a share over the next year. I suspect shorting is having some impact on the price at the moment, just a momentum movement. They will regret their actions when the inevitable squeeze comes, and their attempt to make a quick £10k on 100,000 shares turns into a £40-50k loss overnight.

I think of it like this. What is Flybe worth now? On any view it is worth more than £25 million, just on a NAV basis (it would be impractical to liquidate due to the long term contracts inherent to the airline business, but it gives an indication that this thing is trading at less than HALF of its book value). You could play Devil's advocate and say, "Yes but it is not consistently profitable, so it will burn through its cash".....that is not untrue, its just utterly unimportant when you consider the likely tenor of things over the next year. Lower oil prices, from which they will benefit, and a stronger sterling, which will compound the benefit of the former.<br /><br />They are basically already a bargain, with a freebie in the form of a cheaply leveraged play on oil prices and the Pound. My only worry is, if they get bought out at 30p I'll feel a bit short changed.<br />

It's undervalued on any analysis. Putting aside the risk of bankruptcy, which seems a way off due to the cash reserves of £50 million (albeit down from £80 million), it still is on track for £800 million of turnover in the next year. Factor in slightly lower oil prices, albeit their jf exposure is only 10% or so, and a slightly stronger pound and we could see £25-30 million profit in the next 12 months. DYOR of COURSE. There is risk, but I venture to say it is seriously underpriced risk given if they can squeeze a 3% profit margin next year they will make more than their current market cap in a single year.