Author: Icon8888 | Publish date: Thu, 14 Apr 2016, 02:52 AM
No introduction required, I will go straight to my 5 points as per below.
1. Early Stage of Re Rating Those who have experienced the 2015 furniture stocks bull run will agree with me that we are still at early stage of re rating for Air Asia.
The furniture industry re rating began in early 2015 and lasted for one full year. Many stocks in that sector went up by few hundred percents. If not because of recent strengthening of Ringgit, the process would likely have continued.
Good companies with strong earnings visibility are not easy to come by. If you bump into one, cherish the opportunity and hold on to the stock. Don't kill the goose that lay the golden eggs so soon.
LET THE PROFIT RUN.
2. Still Undervalued Air Asia is expected to do well this year. A survey of analyst reports shows that the group is in position to generate EPS of closed to 30 sen.
At current price of RM2.10, the stock is still cheap.
SEEK GUIDANCE FROM FUNDAMENTALS, DON'T LET EMOTION DICTATES YOUR INVESTMENT DECISIONS.
3. Private Placement Will Result In Strong Alignment of Management and Shareholders' Interest Certain investors are excited by the placement to Tony Fernandes and gang ("TF Incorporated"), but certain investors are not happy. The difference in opinion mostly centred on "allocation of value". But there is no dispute that with so much at stake, TF Incorporated will now be motivated to make it work.
MANAGEMENT CUM MAJOR SHAREHOLDERS NOW HAVE STRONG INCENTIVE TO CREATE VALUE. THIS WILL SPILL OVER TO BENEFIT ALL OTHER INVESTORS.
4. Short Term Catalyst I have never heard of a Tycoon that doesn't like leverage. TF Incorporated will almost certainly make use of margin facility to finance their placement subscription.
When come to margin financing, nothing convinces bankers more than strong share price - "Look, it is trading at RM2.50 now, and you are lending me money to buy at RM1.80. Why worry ?"
In a recent interview with The Star, Tony Fernandes mentioned that the Company targets to convene EGM for the placement on 9 May 2016. My guess is that the placement will be completed shortly after EGM, so as to wrap up the entire exercise before release of strong financial results by end May 2016.
TONY INCORPORATED HAS INCENTIVE TO KEEP SHARE PRICE BUOYANT IN THE IMMEDIATE TERM SO AS TO FACILITATE SMOOTH DRAW DOWN OF MARGIN FACILITY BY SECOND HALF OF MAY 2016.
5. Act Contrarian To Blogger Z There is an emerging consensus in i3 that if you act contrarian to Blogger Z, you are likely to do well.
SINCE BLOGGER Z IS UNCOMFORTABLE WITH AIR ASIA, WE SHOULD OVERWEIGH THE STOCK.
1. Early Stage of Re Rating Those who have experienced the 2015 furniture stocks bull run will agree with me that we are still at early stage of re rating for Air Asia.
The furniture industry re rating began in early 2015 and lasted for one full year. Many stocks in that sector went up by few hundred percents. If not because of recent strengthening of Ringgit, the process would likely have continued.
Good companies with strong earnings visibility are not easy to come by. If you bump into one, cherish the opportunity and hold on to the stock. Don't kill the goose that lay the golden eggs so soon.
LET THE PROFIT RUN.
2. Still Undervalued Air Asia is expected to do well this year. A survey of analyst reports shows that the group is in position to generate EPS of closed to 30 sen.
At current price of RM2.10, the stock is still cheap.
SEEK GUIDANCE FROM FUNDAMENTALS, DON'T LET EMOTION DICTATES YOUR INVESTMENT DECISIONS.
3. Private Placement Will Result In Strong Alignment of Management and Shareholders' Interest Certain investors are excited by the placement to Tony Fernandes and gang ("TF Incorporated"), but certain investors are not happy. The difference in opinion mostly centred on "allocation of value". But there is no dispute that with so much at stake, TF Incorporated will now be motivated to make it work.
MANAGEMENT CUM MAJOR SHAREHOLDERS NOW HAVE STRONG INCENTIVE TO CREATE VALUE. THIS WILL SPILL OVER TO BENEFIT ALL OTHER INVESTORS.
4. Short Term Catalyst I have never heard of a Tycoon that doesn't like leverage. TF Incorporated will almost certainly make use of margin facility to finance their placement subscription.
When come to margin financing, nothing convinces bankers more than strong share price - "Look, it is trading at RM2.50 now, and you are lending me money to buy at RM1.80. Why worry ?"
In a recent interview with The Star, Tony Fernandes mentioned that the Company targets to convene EGM for the placement on 9 May 2016. My guess is that the placement will be completed shortly after EGM, so as to wrap up the entire exercise before release of strong financial results by end May 2016.
TONY INCORPORATED HAS INCENTIVE TO KEEP SHARE PRICE BUOYANT IN THE IMMEDIATE TERM SO AS TO FACILITATE SMOOTH DRAW DOWN OF MARGIN FACILITY BY SECOND HALF OF MAY 2016.
5. Act Contrarian To Blogger Z There is an emerging consensus in i3 that if you act contrarian to Blogger Z, you are likely to do well.
SINCE BLOGGER Z IS UNCOMFORTABLE WITH AIR ASIA, WE SHOULD OVERWEIGH THE STOCK.
No comments:
Post a Comment