Share Price Alert: Air New Zealand Ltd

Air New Zealand Ltd [AIR.NZX] shares have been doing the impression of a kamikaze pilot on speed for the first 3 months of 2011.

Even before the profit downgrade yesterday the shares had dropped from a high of $1.54 in January - the highest share price since mid 2008 - to $1.17 the day before the announcement. A loss of just under 25%.

Shares today were up 2c to $1.08 after closing down at an 8 month low of $1.06 yesterday.

The share price drop can be put down to a combination of oil price rises, and earthquakes in New Zealand and Japan but the uncertainty of its short and medium term prospects is making this company unattractive at the moment.

If you are a reader of mine you will know I am not a big fan of Airlines as investments, and I especially dislike the way Air New Zealand is run but I am going to be unbiased in my assessment anyway.

Surely there must be value in the company at these prices right?

Well if you are a long term investor like myself, forget it. Long term Air NZ has returned 6% in total over the 8 years to February 18 2010. This figure is substantially less than that given today's share price is approximately 30% lower than it was when I made my Feb 2010 calculation.

Short term though you could be onto a winner at these prices.

The Rugby World Cup should get the punters using their planes more in the first half of financial 2012 and they might be able to raise prices to recoup oil cost pressures over the rest of 2011.

After that things start to look a little shakey.

The Japanese, who are big customers of AIRs, may decide to hunker down at home instead of coming down here and the entire town of Christchurch, around 8% of our population, will not be flying anytime soon.

Oil prices may also outstrip the ability of the airline to raise prices further and not affect their patronage.

Just too many variables for a business for my liking!

You may see some more share price pressure if the situation in Japan has longer lasting effects than first thought, so some patience for a further fall might see you get shares under a dollar.

Buy on further weakness for a short term gain.


Share Price Alert

Telecom New Zealand Ltd
New Zealand Stock Exchange Ltd
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Restaurant Brands Ltd
Mainfreight Ltd
Tourism Holdings
Goodman Fielder Ltd
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NZ Refining Ltd
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Xero Ltd

AIR @ Share Investor

Queenstown Aiport Case: Air New Zealand VS Auckland
Queenstown Airport: Loud Voices & Loyalty
Long Term View: Air New Zealand Ltd
John Palmer Tipples on the Shareholder
Mike Pero and Air New Zealand: Capitalism vs Socialism
Rob Fyfe's "Environmental Extremism"
Reality Needs to Bite
Air New Zealand wants another taxpayer bailout

Discuss this stock at Share Investor Forum - Register free
Download AIR Company Reports

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c Share Investor 2011

Auckland Council in conflict of interest furore over Casino Development

If I may be slightly political for a moment for this post - I hardly ever am (yeah right!)

So Mike Lee and his lefty cronies on the Auckland Council want to put the kibosh on a convention centre and development by Sky City Entertainment Group Ltd [SKC.NZX] where they will spend more than $10 million of shareholder money improving streets around their complex.

You would have to ask yourself why Mike and his mates would want to stall the development of a business that provides millions in rates and employs thousands and would employ more with an approved development.

The obvious one that sticks out like a hammer and sickle on a red flag is that the Auckland Council is inherently left and aligned to the Labour Party and they hate development, especially that of a casino.

We wont look at that here though.

The most relevant reason for Mike Lee and his council denying Sky City the right to develop their land and business is that Auckland City Council have a proposal of their own to develop a Council owned, operated and funded convention centre that competes directly with the Sky City development. This is of course public knowledge but wasn't brought up by councilors at planning meetings for the Sky City development or reported in the media over the last few days.

This means that the Auckland ratepayer would fund the bulk of the convention centres development and ongoing running costs.

The cost is in the multi 10s of millions of dollars and the ratepayer will be saddled with debt for generations as convention centres do not make money. Councilors will tell you otherwise but there is no evidence for this at all:

From my peice last year on the Sky City Convention Centre:

"The center was promised to bring out-of-towners who stayed in hotels and spent money," said Heywood Sanders of the University of Texas at San Antonio, who studies the performance of convention centers and is a longtime critic of such publicly financed projects. "They routinely overpromise, and they never do what they're supposed to do. The question is how badly they perform. Putting in a hotel is no guarantee that it will improve the center's performance."

Washington Post: Heywood Sanders of the University of Texas at San Antonio - Researcher of Convention Centre performance.

Ongoing costs will be clearly crippling to Auckland city ratepayers.

Councilors at least need to declare their conflict of interest over this one and decisions being made over the Sky City Convention Centre proposal must be and must also been seen to be seperate from decisions being made over the councils own proposal.

It is not clear at all as to whether individuals on council are making decisions over both proposals and this is obviously an unacceptable practice if it is happening.


Disc I own SKC shares in the Share Investor Portfolio


Sky City Convention Centre @ Share Investor

Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council

Sky City Entertainment Group @ Share Investor

Guest Post - Michele Hewitson Interview: Nigel Morrison
Failed Sky City bid for Christchurch Casino good news for Shareholders
Sky City Entertainment Group Ltd: Christchurch Casino bid falls short of Investment Criteria
Sky City Entertainment Group Ltd: Never mind the width feel the volume
Sky City Annual Meeting & 2011 - 2012 Profit Forecast
Stock of the Week: Sky City Entertainment Group Ltd
Sky City set to lose National Convention Centre bid
Sky City Entertainment Group: Australian Acquisition on the Cards?
Sky City Entertainment Group Ltd: 2010 Full Year Profit Analysis
Sky City Entertainment Group 2010 Full Year Profit Preview
Chart of the Week: Sky City Entertainment Group Ltd
Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Share Investor Q & A: Sky City CEO, Nigel Morrison
Sky City Entertainment: CEO Nigel Morrison discusses 2010 HY
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
Sky City Entertainment Group Ltd: Download full Company analysis
Sky City 2010 full year profit looking good
Long Term View: Sky City Entertainment Group Ltd
Sky City Entertainment: CEO Nigel Morrison discusses 2010 Half Year
Sky City Entertainment Group 2010 Interim Profit Review
Sky City to focus on Gaming
Sky City debts levels now more manageable
Insider Trading on Sky City shares
Sky City Profit Upgrade: Always on the Cards
Sky City's Current Cinema "Boom" a Horror Story in Disguise
Stock of the Week: Sky City Entertainment Group
Are Insiders selling Sky City Stock?
Sky City Entertainment 2009 Interim Result Preamble
2008 Sky City profit analysis
Sky City share offer confusing and unfair for smaller shareholders
Sky City Entertainment 2008 Full Year profit results , NZX release, 2008 full year presentation, result briefing webcast, financial statements
Sky City 2008 profit preamble
Sky City outlines a clear future plan
As recession bites Sky City bites back
Sky City Assets: Buy, sell and hold
Why did you buy that stock? [Sky City Entertainment]
Sky City Share Volumes set tongues wagging
Sky City half year exceptional on cost cutting
NZX Press release: Sky City profit to HY end Dec 2007
Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Under performing
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit


Discuss SKC @ Share Investor Forum
Download SKC Company Reports

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c Share Investor 2011

Share Price Alert: Telecom New Zealand Ltd

Telecom New Zealand Ltd [TEL.NZX] has once again reached a share price level below 2 dollars at close of trading yesterday. Shares closed down 5.5c or 2.7% to close at $1.985c

The shares last plumbed these depths in August 2010 after surging to an all time low in June of the same year of $1.78.

This has come after NPAT was down 32% for the half year to December 31 2010. The shares have dropped 36.5c or 15% from a 52 week high of $2.33c, since the profit announcement of February 12.

There has been little positive news out from the company in a month and the outlook for FY 2012 looks like it might be down on 2011.

The support at the 52 week lows last year was on average volumes sold so this resistance could come under more pressure as largely foreign owners of this stock (some from Japan) dump stock for much needed cash.

The company is worth buying at these levels and lower just for the dividend a a quick flick when the shares come back into favour again.

Global markets will come under pressure tomorrow from todays 6% drop in the Nikkei Index, so there will be further opportunity to buy.


Share Price Alert

New Zealand Stock Exchange Ltd
Mainfreight Ltd
The Warehouse Group Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
Fletcher Building Ltd
Restaurant Brands Ltd
Mainfreight Ltd
Tourism Holdings
Goodman Fielder Ltd
Pumpkin Patch Ltd
Hallenstein Glasson Holdings Ltd
NZ Refining Ltd
Freightways Ltd
Xero Ltd


Telecom NZ @ Share Investor

Telecom New Zealand 2011 first half profit review
Telecom New Zealand 2011 first quarter profit review
Telecom Chart: Lazarus Recovery on lower volume
Telecom maybe oversold
Telecom NZ Share Price has "Jumped the Shark"
I was Wrong... sort of
Telecom NZ: TV3 60 Minutes Segment more like Corporate PR
Telecom Share Price Limbos but has it jumped the Shark?
Telecom NZ: Saint Gattung gets her Ya Ya's out
Telecom NZ: Bye Bye Paul Reynolds
Long Term View: Telecom NZ Ltd
Stock of the Week: Telecom Ltd
Revisiting Telecom
Getting cute and fluffy with Teresa Gattung
Telecom NZ Hangs up
Business Gobbledygook puts up barriers to communication
A Rare Breed
Telecom NZ facing a watershed period
Biology a major key in "glass ceiling" for women
Telecom rewards Gattung for mediocrity

Download TEL Company Reports
Discuss TEL at Share Investor Forum - Register free


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c Share Investor 2011

Len Brown leaves Manukau Council in a sea of debt

Accounts just out on Len Browns last 16 months as mayor of Manukau City show he spent at least 400 million dollars more than budgeted for.

It doesn't look good for the amalgamated Auckland City in respect to rate rises.

They might be rising twice the inflation rate for 2011-12 9 (twice as much as Len promised pre election)but they look set to rise higher than that in the coming years to pay for the debt that Len is going to rack up on our behalf.

Makes Dick Hubbard look like a great mayor.

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c Darren Rickard 2011