SYD - Sydney Airport

[notting]

Buy low sell high repeat till rich.

I have no doubt that the second air port is going to start happening.
You'd need to careful of largely unjustified aggressive selling when that news arises.
Larger players need to be able to get out, so may not be getting back in with that news coming.

 

[nulla nulla]

Political Footballs make for lots of volitility. It is unlikely that any NSW State Government or Federal Government is going to disenchant the voters in Western Sydney by inflicting a second airport on them without first coming up with some magical solution to the traffic/transport/infrastructure problems that currently exist.

Even when Tony Abbott gets in at the next federal election, Barry isn't gong to let him stuff up his own state re-election prospects. I expect that Sydney Airport will be arround for a long time and buying low, selling high will be a recurring theme for some time in the future. At least I hope so. Not rich yet though.

 

[notting]

Sydney airport will still exist but there is going to be a second one.
It may have been a political hot potato up until now, however, simple demand is going to dictate its necessity.
As long as Sydney airport can continue to attract with its dividend whilst serving it's massive debt it should be a nice playable side winder.

 

[bellamy83]

any new thoughts on SYD, I see that they have the licence (or whatever it is called) to build and own the 2nd airport if thats the way they want to go?

 

[nulla nulla]

any new thoughts on SYD, I see that they have the licence (or whatever it is called) to build and own the 2nd airport if thats the way they want to go?

G'day,

Where did you see that? I would have thought that was positive news but the share price action doesn't seem to reflect it.

 

[nulla nulla]

I understand Sydney Airport has first option to develop any second airport (announced arround July 2012). When SYD came off their highs in December 2012/January 2013 I purchased parcels at $3.26, $3.21, $3.20, $3.11 and $3.10. I did not buy any more at $3.05 as I consider that I was already close to overweight and it might be worth holding back in case the share price fell below $3.00.



The quick, innitial, recovery to test $3.26 gave me confidence that SYD would recover above $3.31, possibly even $3.42 so I held on to all parcels. Naturaly SYD then plunged again to $3.12 and began a slow tortuous trip sideways and tenuously upward. For every three steps upward there were two steps (or more) backward. Where I would normally look to close out a trade in less than 21 days the holds ran into months. Eventualy I was able to trade out the share purchased at $3.10 and $3.11 for solid profits at $3.19 and the parcels bought at $3.20 and $3.21 again for reasonable profits at $3.26. However the parcels purchased $3.26 are setting records for longest holds having now gone past 75 days.

The yield on the share price from the low of $3.05 has probably encouraged buyers seeking security in yield to get on board. While I believe SYD is going to recover above $3.31 (there is a div again in June and SYD normaly experience a bit of a run up before it goes ex-div) I now have a quandry as to whether I should sell, if & when it hits the original target of $3.31 or having held the remaining two parcels for so long, should I continue to hold on the prospects of a better return in any run up or combo Div and capital gain?

SYD
Date:	20-December-2012	18-January-2013	22-March-2013	05-April-2013
Closing Price	3.56	3.05	3.20	3.28
Issued Shares	1,861,210,782	1,861,210,782	1,861,210,782	1,861,210,782
Capital	6,625,910,384	5,676,692,885	5,955,874,502	6,104,771,365
Earnings $	0.1827	0.1827	0.1827	0.1827
ROE	5.13%	5.99%	5.71%	5.57%
Dist $	0.21	0.21	0.21	0.21
Yield %	5.90%	6.89%	6.56%	6.40%
P/E	19.49	16.69	17.52	17.95
NTA $	3.55	3.55	3.55	3.55
Discount to NTA	-0.28%	14.08%	9.86%	7.61%

Decisions, decisions. If SYD hits my exit target and I sell, the share rprice will likely continue a slow sideways recovery of sorts before it goes ex-div. If it hits my exit target and I don't sell, then it may fall again as it has in the recent past. Problem is, would I be better off getting out and putting the capital to work on another share where the paterns are generating returns of 1-2% every few weeks. I may have just answered my own problem. As always do your own research and good luck.

p.s. Don't get emotionaly attached to your shares regardless of how kind they have been to you in the past.

 

[nulla nulla]

I elected to cash out the last two parcels at $3.31 and $3.35 last week. Naturaly SYD surged up to test $3.38 after I sold, before settling back to hold $3.35 in the closes for Friday and Monday.



The Boston Bombings triggered a sell down after open, however solid buying saw SYD hold the $3.30 level on large volumes then rally to close out at $3.34. I'm back in at $3.30 looking for a run up into the high $3.30's+.

As always, do oyur own research and good luck.

 

[nulla nulla]

I thought $3.88 & $3.89 were good exit points and cashed out looking for another retrance and re-entry. However the pat on the back faded from memory quickly when SYD kept going to the low $3.40's then rallied higher through the week. The auction on Friday was spirited to say the least with SYD reaching an interday high and new high for the year closing on $3.47 (Fortunately I still have my small long term parcel in the SMSF).



The price movement pattern on the chart looks simmilar to late last year. It wouldn't surprise me if large fund managers were buying up for the June yield and a potential capital gain as well. SYD is still trading at a discount to NTA and the yield is still above 6%. With the inflow of funds to Australia seeking yield it would not surprise me to see SYD test last years highs and even push above the NTA value.

SYD
Date:	20-Dec-12	18-Jan-13	01-Feb-13	22-Mar-13	26-Apr-13
Closing Price	3.56	3.05	3.23	3.20	3.47
Issued Shares	1,861,210,782	1,861,210,782	1,861,210,782	1,861,210,782	1,861,210,782
Capital	6,625,910,384	5,676,692,885	6,011,710,826	5,955,874,502	6,458,401,414
Earnings $	0.1827	0.1827	0.1827	0.1827	0.1827
ROE	5.13%	5.99%	5.66%	5.71%	5.27%
Dist $	0.21	0.21	0.21	0.21	0.21
Yield %	5.90%	6.89%	6.50%	6.56%	6.05%
P/E	19.49	16.69	17.68	17.52	18.99
NTA $	3.55	3.55	3.55	3.55	3.55
Discount to NTA	-0.28%	14.08%	9.01%	9.86%	2.25%

Then again, one of the international fundmanagers might elect to cash out their capital gain and currency rate improvement, pushing the price down like what happened in January of this year and take their money home :1zhelp:.

As always do your own research and good luck .

 

[coolcup]

I'm a bit confused about this chart:



Do you think it is bullish or bearish?

On the one hand I see higher peaks and higher troughs, but the troughs are moving upwards faster than the peaks. It has respected the lower upward sloping line. The higher peaks mean sellers are only overwhelming buyers at higher and higher prices which is positive. And the troughs are higher at a faster rate, meaning buyers are moving in quicker to buy the dips. I can only think this is positive?

However, the chart also looks like a rising wedge pattern http://en.wikipedia.org/wiki/Wedge_pattern which is considered a bearish indicator... Or is this too long term a chart to be seeing the pattern as a rising wedge?

Anyone better at reading charts than me care to try and explain? It would be much appreciated.

 

[skc]

I'm a bit confused about this chart:

Anyone better at reading charts than me care to try and explain? It would be much appreciated.

SYD went returned a large chunk of capital late 2011 and that was captured in your chart. If you make adjustment for that you'd see the trend much more cleanly.

 

[nulla nulla]

In December 2011 Sydney Airport did a capital return of $0.80 per share in respect of one of the stapled units. Naturaly the share price dropped by $0.80 immediately after. Then SYD began a long slow climb over almost 12 months reaching the NTA value of $3.55+ before it went ex-div in December 2012. Then it was sold down mercilessly in January 2013 by an international holder that had been one of the principal buyers in 2012. An exercise using the information provided in their "change of substantial holding notice" revealed that they averaged a higher price during the sell down than their average purchase price and made several million dollars out of the process.

Subsequently the share price climbed from $3.05 to $3.60+ then gold and the Aud$ were sold down. The exodus of international funds from the All Ords has also impacted on SYD. I'm surprised it hasn't crashed more than it has. The chart in respect of the last six months or so of trading suggests it may be trying to recover.



Than again.....

As always do your own research and good luck.

 

[coolcup]

SYD went returned a large chunk of capital late 2011 and that was captured in your chart. If you make adjustment for that you'd see the trend much more cleanly.

View attachment 53138

It looks like the wedge I am seeing is coming about as a result of the capital return inflating the pre-capital return prices on my chart. Thanks for the heads up.

On another note, if the SYD chart actually looked the way I showed it (ie there was no capital return and the price just tanked on that day for other reasons) would you see the chart as being a rising wedge and thereby bearish (as I had drawn it above)?

Thanks to you also nulla nulla.

 

[nulla nulla]

I think that the falling Aud$ will eventualy make SYD attractive to foreign investors again and the foreign investment level will increase again closer to the 40% limit. At some point SYD must reach a level where the share price plateau's as it trys to find a balance as increases driven by growth prospects taper off and yields drop.

As a short term investor trading the share price volitility in SYD, the risk I am more mindful of is that any of the off shore large investors could elect to take large profits down the track and cash out the combo of an increased capital gain and any improvement in the Aud$ versus the US$.

The sudden drop is painful when you are holding , painfull when you jump in at a low point looking for a bounce that doesn't come and only slowly erased when you are able to trade any subsequent (slow) price rebound.

 

[piggybank]

Did they strike oil or Gold at Sydney airport yesterday with over 134m shares changing hands? No actually Abu Dhabi used UBS AG (as underwriter) to sell 104m for not less than $3.60.

ASX-listed Sydney Airport (SYD) is pleased to announce the successful completion of its placement of approximately 86 million stapled securities to professional and sophisticated investors and institutions, issued at a price of $3.60 per stapled security raising approximately $308 million. The issue price is equal to the previous close and represents a 2% premium to the 5-day VWAP. As outlined in releases to the ASX on 14 August 2013, the net proceeds raised through the placement will be used to finance the acquisition of the monetising minority interests in Sydney Airport.

 

[nulla nulla]

The buy out of the minority Sydney Airport owners by Sydney Airport through the issue of script at $3.60 and cash appears to have appealed to the market. With the price roaring up after open on Thursday to peak arround $3.80 before settling back to the low $3.70's. It climbed even higher on Friday closing arround $3.85.

Andrew White, of the Australian on August 15, 2013, reports that UBS is beleived to have scooped up the Abu Dhabi Investment Authority (ADIA) stake of 103 million shares (representing 5.3% of shares on issue) at $3.67 per share. This sale will reduce foreign ownership levels to arround 24.3%. With the application for foreign ownership levels to be allowed to increase to 49% from the current 40%, the alleged sell off by ADIA will open up the share register to acquisition by foreign investors. The Aud$ is probably working in their favour at the present level.

I say alleged at this point as the ADIA hasn't filed a notice of ceasing to be a substantial holder at this point of time. This in itself is not surprising. A quick check of notices in respect of change of shareholding shows that ADIA filed an inital notice on 1 June 2011 acquiring 94,553,945 shares representing 5.0802% of shares on issue and haven't filed any notices since in respect of lifting their holding to the 5.3% level.

UBS filed a "Notice of initial Substanial Holder" on 16 August 2013 showing that they have acquired 130,382,938 shares representing 7.01% of shares on issue (this appears to be significantly more than the alleged 103 million shares sold by ADIA) I'm not sure as to whether or not this constitutes foreign ownership.

The share price is currently at a new high (allowing for the capital return in December 2011). Hard to see it having scope for huge growth in the current economy and the question of a second Sydney Airport hanging over their heads. Then again what would I know. As always do your own research and good luck.

 

[nulla nulla]

Out of curiousity I worked out the return that the Abu Dhabi Investment Authority (ADIA) made on their initial purchase of 94,553,945 shares at arround $2.96ea.

Date	Shares	Price	$	%
21-Jun-11	94553945	2.96	279,879,677.20
14-Aug-13	94553945	3.67	347,012,978.15
Capital Gain			67,133,300.95	23.99%
Distributions
24-Jun-11	94553945	0.11	10,400,933.95	3.72%
19-Dec-11	94553945	0.80	75,643,156.00	27.03%
22-Dec-11	94553945	0.10	9,455,394.50	3.38%
25-Jun-12	94553945	0.11	10,400,933.95	3.72%
21-Dec-12	94553945	0.10	9,455,394.50	3.38%
24-Jun-12	94553945	0.11	10,400,933.95	3.72%
Gross Return $			192,890,047.80	68.92%

A chart of the share price movement in the same period:



Not a bad return on your investment for a two year hold.

 

[Muschu]

A question ---

Did anyone notice if the SYD SP dropped significantly today before the market sensitive announcement was released ?

 

[Ves]

A question ---

Did anyone notice if the SYD SP dropped significantly today before the market sensitive announcement was released ?

Macquarie announced their intentions of distributing their Sydney Airport stake (within their results presentations) before the market opened. Not that I agree that a 2.5% drop is significant.

 

[Muschu]

Macquarie announced their intentions of distributing their Sydney Airport stake (within their results presentations) before the market opened. Not that I agree that a 2.5% drop is significant.

Many thanks Vespuria.

 

[coolcup]

Many thanks Vespuria.

Macquarie block traded the residual stake in SYD which they are not distributing in specie this morning. Stocks usually underperform on the day of a block trade.