Thursday, October 28, 2010

Make me an offer I cant refuse: Auckland International Airport Ltd

I know my entry price for shares in the Share Investor Portfolio but what price do I sell that share for if I was made an offer today?

I have been thinking about this over the last week or so, so in the first of a series of 17 installments - the number of companies in the portfolio - I am going to discuss what my sell price might be and why.

Please keep in mind that most of the portfolio I don't intend to sell anytime soon, if at all, but if I was offered a predetermined price right now I would sell if that price met my future expectations of financial performance for the company. The offer would have to take into account the prospects for the company in the long term and the possibility I may not be able to do better return wise were I to use the proceeds of a sale to purchase another investment. My investment outlook is 10 years plus.

Many of you are going to be completely blown away by the price I put on my investments but this is only my opinion so don't shoot me without thinking your response through first.

The first stock I wish to cover off is Auckland International Airport Ltd [AIA.NZX]. This stock has performed well for me and has returned around 50% thus far when dividends, capital increase and tax credits are factored in. 1000 AIA shares were first purchased in 2006 and then 4000 in 2009. 304 shares were bought in 2009 at $1.65 as part of a capital raising.

A great little earner so far!

The main reason I bought this company is its status as a near monopoly in a fast growing sector that is protected by the capital outlay and political problems that another port competitor would face, so it has a great little competitive moat around it.

Just to show my readers what value I put on it, I did not sell the stock when the Canadian Pension Plan came calling a few years back and offered around $4.64 for a stake in the company.

My long term view of this particular company puts a far higher value on it.

Profit has been stagnant for the last few years but if historical growth continues long term investors in AIA will be rewarded.

For these reasons $10 plus per share would get me to part with my beloved AIA shares today.

Queenstown Airport Buyout @ Share Investor

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Queenstown Airport: Air New Zealand's Crocodile Tears
Queenstown Airport: AIA purchase good Long-Term but will cost shareholders Short-Term

AIA @ Share Investor

Long Term View: Auckland International Airport
VIDEO - Simon Moutter on Australian Airport Purchase
Auckland Airport Capital Raising a fair call
Auckland International Airport lands Australian Ports
What Infratil sale of Auckland Airport stake means...
Is another Auckland Airport bid likely under a business friendly Government?
Latest Airport coverage
Cullen's move on Auckland Airport has far reaching effects
Cullen's move on AIA tax plan Anti-Business
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

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Download AIA Company Reports

Download Queenstown Airport Company Reports

c Share Investor 2010

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