FLT - Flight Centre Travel Group

[persistentone]

Re: FLT - Flight Centre

Their full year dividend tend to be higher than their interim (seasonality perhaps) - by 30% based on last year's numbers. So half year = 9c, full year = 12c. Giving ~21c and yield of 6% = $3.5.



The same argument holds for any short trades so on this basis no one should ever short anything?! Besides, I don't intend to short-and-hold so the remote chance of a buyout offer at an unknown distant future isn't that big of a worry. I will take profit at target, or get stopped out as I move my trailing stop.

I hope FLT does recover one day as it is a truely great Australian story. There was an ABC show done on "Skroo" Turner about his early 70s top-deck ventures. http://www.abc.net.au/queensland/stories/s1107592.htm. They hired a dobule decker, toured around Europe without any local knowledge, and almost killed a busload of backpackers in the process...

Anyway, I can see no catalyst for this stock in the short term, and one shouldn't let nationalistic sentiments affect trading decisions.

Shorting always has unlimited loss risks in theory. In practice when you short a company that has a P/E of 100 with growth of 10% per annum, a market cap of $5Billion with $100M net cash on their balance sheets, your odds of a takeover at 300% of the market cap seem pretty slim. I'm only making the point that with something like Flight Centre it's already pretty oversold on a long term historical basis. Risk might equal or exceed reward for such a stock.

 

[ROE]

Re: FLT - Flight Centre

No one short his stock (i could be wrong) just too small to make any decent money for hedge fund..

But if they sort and create this sort of price..thanks .

the trouble for the shorter now is thee is no one selling for them to buy back
so they get squeeze and shorting company with good fundamental is dangerous because if someone keep buying while they shorting eventually
they need to buy back the shares and pay back and if that person is not selling they are in real trouble.

look what happen to all the guys that short VW all gone bankrupt cos Porsche was buying them as they short and end up hold most of the shares and Porsche said u want it back? i sell u twice or 3 times the price u sell not long ago..kaboom game over...one guy lost a few Billion and end up killing himself.

http://www.economist.com/finance/displaystory.cfm?story_id=12523898

 

[Rainmaker2000]

Re: FLT - Flight Centre

Picked up some more of these puppies today......oh for the heady days when they were 32$ and I thought they were cheap at 16$...its been a journey.....seems like last week I was looking forward to the privatisation of the business and a cash rebate of about $10, which is where they were going to insert the debt.......now you get the whole thing, almost debt free for $4 with Liberty thrown in....at these prices...........I've asked my employer to pay me in FLT shares....unfortunately, not practical, I have to pay brokerage!!

 

[skc]

Re: FLT - Flight Centre

No one short his stock (i could be wrong) just too small to make any decent money for hedge fund..

But if they sort and create this sort of price..thanks .

the trouble for the shorter now is thee is no one selling for them to buy back
so they get squeeze and shorting company with good fundamental is dangerous because if someone keep buying while they shorting eventually
they need to buy back the shares and pay back and if that person is not selling they are in real trouble.

look what happen to all the guys that short VW all gone bankrupt cos Porsche was buying them as they short and end up hold most of the shares and Porsche said u want it back? i sell u twice or 3 times the price u sell not long ago..kaboom game over...one guy lost a few Billion and end up killing himself.

http://www.economist.com/finance/displaystory.cfm?story_id=12523898

That's a great VW story ROE thanks for the link. In this instance I can't say that VW has good fundamentals, but really just the Porsche guys have great finance skills. Funny that VW was the world's most valuable company at one instance!!

Not sure there is anyone out there doing the same on FLT. I am also not a hedge fund so I doubt my few $K going to cause a short squeeze.

 

[nomore4s]

Re: FLT - Flight Centre

That's a great VW story ROE thanks for the link. In this instance I can't say that VW has good fundamentals, but really just the Porsche guys have great finance skills. Funny that VW was the world's most valuable company at one instance!!

Not sure there is anyone out there doing the same on FLT. I am also not a hedge fund so I doubt my few $K going to cause a short squeeze.

Not possible over here due to the disclosure rules. Also larger players will determine size of shorts on risk and liquidity - you would be stupid to take a large short stake in companies with lower amounts of stock on issue or with tightly held registers, doesn't mean you can't short it just be sensible about it.

Still a lot of misconceptions about shorting imo, there is no way FLT current sp has anything to do with shorting, even if you couldn't short it the sp would be at the same level it is now.

 

[gohawks]

Re: FLT - Flight Centre

Dropped past $4 just earlier, something i never thought i would see!

How much more do we see this one slipping tech traders?

 

[prawn_86]

Re: FLT - Flight Centre

Dropped past $4 just earlier, something i never thought i would see!

How much more do we see this one slipping tech traders?

Im not a techie, but based on yeild (assuming the pay an 11c final div) that would make a 20c total div, so at $4 its yeilding 5%.

You wouldnt think it would drop below $3 (6.6% yeild) since the divvy has already been cut substantially, but who really knows what will hapen

 

[skc]

Re: FLT - Flight Centre

Dropped past $4 just earlier, something i never thought i would see!

How much more do we see this one slipping tech traders?

They did go ex-div today at 9c so you can argue that they are still above $4. In fact they are trading $4.06 now so not that great a fall today considering the overall market.

 

[oldblue]

Re: FLT - Flight Centre

Im not a techie, but based on yeild (assuming the pay an 11c final div) that would make a 20c total div, so at $4 its yeilding 5%.

You wouldnt think it would drop below $3 (6.6% yeild) since the divvy has already been cut substantially, but who really knows what will hapen

A notional 6.6% yield in today's market might be seen as a bit skinny when you look at some of the others around, eg the banks, even after probable hefty cuts.
As you say, who really knows what will happen?

 

[JTLP]

Re: FLT - Flight Centre

Hitting 52 week low as I type...but Directors buying up BIG...I think one bought 100,000 from memory (about $383,000 worth) and the other bought 10,000 ($37,000)...faith in the long term or just a reassurance tactic? I'd have to think the former with one director throwing down a fair packet...

 

[skc]

Re: FLT - Flight Centre

Testing $3.60 mark all afternoon and may be broken by end of play today, judging by the strength (or there lack of) in the DOM.

Director buying can sometimes indicate insider news and works for some stocks, particularly smaller caps (which FLT may soon qualify). But it can also just indicate that the directors don't know any better, or that they are emotionally attached to their own baby...

Harvey says: “I bought Harvey Norman shares at $4.55, then at $3.90. I thought Harvey Norman shares were good value at $4.55.” But it’s a “paper loss’’ Harvey is keen to point out for a company that also owns Domayne and Joyce Mayne outlets.

http://www.compareshares.com.au/black42.php

 

[skc]

Re: FLT - Flight Centre

Another day, another low. $3.45 as I type. This has reached my price target, but still look very weak. Should I hold my short, or cover?

Market do overshoot on the down side a fair bit these days. I think I will just put a tightish stop slightly above $3.6. That level has been a bit of a support in the past few days.

 

[suri]

Re: FLT - Flight Centre

FLT Closed in negative territory from 16th Feb 08 $6.00 to $3.40are we missing on any information?? Please update if u have any news

 

[nomore4s]

Re: FLT - Flight Centre

FLT Closed in negative territory from 16th Feb 08 $6.00 to $3.40are we missing on any information?? Please update if u have any news

lol, no news besides underwhelming results & slashing of the d/e in a sector with poor sentiment due the current global problems.

Slashing the d/e like that with the poor outlook for the sector the sp was always going to go only 1 way imo. Cutting the d/e like that gives current holders no reason to continue to hold - especially from higher prices - and also doesn't give people looking to get on board a reason to buy yet.

Probably getting oversold now and due for a bounce at least.

 

[persistentone]

Re: FLT - Flight Centre

lol, no news besides underwhelming results & slashing of the d/e in a sector with poor sentiment due the current global problems.

Slashing the d/e like that with the poor outlook for the sector the sp was always going to go only 1 way imo. Cutting the d/e like that gives current holders no reason to continue to hold - especially from higher prices - and also doesn't give people looking to get on board a reason to buy yet.

Probably getting oversold now and due for a bounce at least.

Very well said, unfortunately. Had they cut the dividend in the same proportion as the reduction of cash flow, I think people would have interpreted this as prudent, and we might have seen a sell off to $4.5. Cutting the dividend so much more than the loss of cash flow takes all cards off the table. The institutional investors sell off in the first wave, and much of the activity we see in the last few days is probably retail investors.

Many of the retail investors probably see this as an income stock. You take away their income from them and they no longer want the stock.

The other point to make is that an extreme dividend reduction like we saw broadcasts fear to the market. It makes it look like management is uncertain about the future and is going to be overprotective of its cash to buffer against uncertainty. No one should be surprised to see the investors back off in the face of management showing fear.

 

[Rainmaker2000]

Re: FLT - Flight Centre

It is the small shareholders selling in this market on blind fear......probably disgruntled Intelligent investor subscribers........seriously, round 70% of this stock is locked up by owners and instos so it's the least informed dictating the market......and gosh they are scarred

And the information out of aviation is all bad...........Jetset, a major competitor, has announced two very large profit downgrades in two months

Flt is certainly no jetset or quantas or the near bankrupt Virgin Blue.......I'm not trying to rationalise with those who are blind scarred........I have been buying off them though!!!!!!!!!..........hopefully a bit of stability soon would be a little reassuring, if only to my ego..hehe

 

[Rainmaker2000]

Re: FLT - Flight Centre

Well, this share price has got me beat.......has anyone got any theory as too why this stock is up, what about 80% in the two weeks since I last posted.....

Can anyone believe the share price appreciated 12% alone today when it published a 'letter' which contains identical information and wording from their reported information few weeks ago......

I can't say I've experienced much like this......even more bizarre.....is my impulse to run off to bank some rare major gains from this market is well and truly tempered by my valuation of FLT which is north of $20......don't believe that value, consider that the 'anaysts' who have a sell on this stock think it will earn 80cents a share this year......in a turnaround year.....with last year the stock earning bout 1.50 with no one offs gains or losses.....Are you out ther ROE, what is this baby worth??

 

[gohawks]

Re: FLT - Flight Centre

Well, this share price has got me beat.......has anyone got any theory as too why this stock is up, what about 80% in the two weeks since I last posted.....

Can anyone believe the share price appreciated 12% alone today when it published a 'letter' which contains identical information and wording from their reported information few weeks ago......

I can't say I've experienced much like this......even more bizarre.....is my impulse to run off to bank some rare major gains from this market is well and truly tempered by my valuation of FLT which is north of $20......don't believe that value, consider that the 'anaysts' who have a sell on this stock think it will earn 80cents a share this year......in a turnaround year.....with last year the stock earning bout 1.50 with no one offs gains or losses.....Are you out ther ROE, what is this baby worth??

I believe the rise is more to do with general market sentiment and also directors buying up big in the last couple of weeks. IMO it was always bound to happen $3 mark seemed ridiculously low for a share of this quality. Bought some more at the mid $3 mark so loving this spike.

 

[ROE]

Re: FLT - Flight Centre

Well, this share price has got me beat.......has anyone got any theory as too why this stock is up, what about 80% in the two weeks since I last posted.....

Can anyone believe the share price appreciated 12% alone today when it published a 'letter' which contains identical information and wording from their reported information few weeks ago......

I can't say I've experienced much like this......even more bizarre.....is my impulse to run off to bank some rare major gains from this market is well and truly tempered by my valuation of FLT which is north of $20......don't believe that value, consider that the 'anaysts' who have a sell on this stock think it will earn 80cents a share this year......in a turnaround year.....with last year the stock earning bout 1.50 with no one offs gains or losses.....Are you out ther ROE, what is this baby worth??

Hey been busy .. I'm still holding and FLT still has more to go yet.
Uncle Walter once told me, if you buy a quality company at bargain price something good may happen to it

I could not believe my eyes with FLT price...dream do come true when you wish you can buy FLT at this sort of price some week ago.

How much this baby worth you ask, I shall give you 2 calculations

Case 1 Worse case scenario:
Earning 35 cents a year (way low even with recent earning report), with 5% growth for 10 years, then say it stay like that forever from here on till the end of its business life ... I factor 5% you can get your money if put in the bank...and I estimate this scenario to be 80% likely to occur.. the intrinsic value of this stock will be around $8 - $8.40

Case 2: best case not impossible but with its track record performance not hard and I give myself only 60% that I get it right.

Earning 60 cents a year ..growth for 10 years at 8% and never growth again.
for the rest of its life between $13-$14 a share.

so at $4-$5 a stock this guy give you 50% margin of safety even in absolutely everything dies scenario .... a absolutely STEAL and boy did I buy when I see the price ... any performance outside those 2 scenario you get a staggering return on investment.....

and of course I been follow FLT for years and I know its management style without need to meet them... Graham Turner is a remarkable manager, he doesn't mess around...he get thing done and when thing are not profitable he doesn't wish something nice will happen to FLT he takes speedy steps to correct it and turn it profitable again... Watch Liberty in US 2 years from now and you understand the genius of Graham Turner.

They survive the dot.com, they survive 9/11, they survive the ACCC
and they came out super strong 2 years ago then this financial crisis hit
just another small hurdle for Graham to kick ass and chew bubblegum.

 

[skc]

Re: FLT - Flight Centre

Hey ROE, can I ask what discount rate you use for your DCF calculations, and how you came up with it (e.g. using comparables, historical beta)?

thanks