Air T Inc. (AIRT)
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Six Air Courier Stocks to Transport Your Portfolio to New Heights [view article]
.Air courier stock data
www.stockvaluelist.com...
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Six Air Courier Stocks to Transport Your Portfolio to New Heights [view article]
What about Atlas Air (AAWW)? ReplySleuth
Six Air Courier Stocks to Transport Your Portfolio to New Heights [view article]
ANS has agreed to be acquired by private equity firm Bayside / H.I.G., so the upside is limited to about 4% at the current price. ReplySix Air Courier Stocks to Transport Your Portfolio to New Heights [view article]
AIRT has paid a nice dividend for quite sometime now. Also, is big in de-icing. I don't believe it's as speculative as listed ReplySix Air Courier Stocks to Transport Your Portfolio to New Heights [view article]
you have ups pe 174.it should be 20.erroneous posting. ReplyEditors
General Discussion on AIRT
Is this a buy or a sell? ReplyAir T vs. Apple? Not Even Close [view article]
Daniel,I agree with what you are saying, but I'm not necessarily advocating projecting a growth rate after year 10. Just the value in perpetuity. So, let's just assume that AAPL continue to earn 28.11 every year after 10, hence zero growth.
So...
The PV of EPS for 1-10 is 101.74
Then the PV for 28.11 in years 11,12,13,14,......... 49,50,....
=28.11/.05=562.21
discount back from year 10-- 345.15
The total value of AAPL would be $446.89
I agree with your qualitative points. Spot on.
Reply
Agramonte
Air T vs. Apple? Not Even Close [view article]
Turley,Many companies use 8-10% as an internal hurdle rate--I was generous in discounting at 5% for years 1-10, as this is typically a risk-free rate. As such, discounting at 9.5% in the first 10 years, still assuming 20% earnings growth gives an Intrinsic Value of about $80/share (about 50% below current prices).
After that, I guess it's fair to grow earnings at 5% (who knows, we might have a depression at that point?). I really struggle after year 15--in practical terms, where was AAPL 15 years ago, and where will they be 15 years from now? Who knows? Regardless, growing revenue at 5% during years 10-15 gives us a valuation of about $117/share. While fraught with execution risk, this may be achievable. I haven't screened it lately, but I suspect VERY FEW companies have had 20% earnings growth for 10 years. Think about it--with compounding, etc., it would only take one flat year to mess things up.
That's where it starts to get inplausible. How many companies can keep from having a bad year or two during a 10 year stretch? As I recall, AAPL was losing money in 1999. Their phenomenal growth in 2005, 2006 and 2007 enabled them to overcome the drag at the beginning of the decade. Bottom line: while the constant growth model is good from a theoretical standpoint, and my mathematical brain wants to add something to cover earnings in perpetuity, I struggle to comprehend what might be going on beyond year 10, let alone year 15. The changes in the technology alone due to Moore's Law would be enough to boggle the mind after year 10. Lots of food for thought and even more risk and uncertainty. In short, plenty of moving parts for a company that, despite a good four year run, hasn't yet proven its ability to grow consistently for a decade. In fact, I can only think of a handful of companies that have shown an ability to grow a large enterprise for a decade, and many of them are already held by Berkshire Hathaway: GE, P&G, American Express and perhaps a couple of oil companies. Reply
Air T vs. Apple? Not Even Close [view article]
Daniel,What you could is assume that sales don't grow after year 10, or grow at the rate of inflation. just need a continuing value. The constant growth model is used.
EPS(10) * g (inflation) / (Ke - g)
Or 28.11 /.05 and then discount to present.
I would probably use a higher discount rate than 5% for the first 10 years since the growth is uncertain and volatile, hence risky. Yet, for the continuing value or mature phase, I would use 5% there.
Just my opinion
Reply
Agramonte
Air T vs. Apple? Not Even Close [view article]
There's more analysis, this time more qualitative, on tap for Monday. Thanks for the comments and feedback. Your unique perspectives are appreciated. ReplyAir T vs. Apple? Not Even Close [view article]
20% growth for another 20 years? LOL! ReplyAgramonte
Air T vs. Apple? Not Even Close [view article]
TurleyYou are exactly right. Taking EPS growth at 20% annually out to 20 years gives about $590/share. I used 10 years for a very practical reason: I suspect Steve Jobs will be sipping Mai Tais in Miami in less than 20 years (Bill Gates is already bowing out and Andy Grove is long gone, but John Chambers is still going strong at 58). In other words, 20 years is a long time and Apple may not even exist as we know it today. It was certainly a mess before Jobs came back--who knows what'll happen after he leaves. Then again, maybe in 20 years Warren Buffett will still be around (at 97) and Berkshire Hathaway's A shares could be trading at $1 million? Thanks for the comment. Reply
Air T vs. Apple? Not Even Close [view article]
One thing author leaves out- Value of EPS for years 11 to infinity? The continuing value or residual value. That's important, it would add a few hundred dollars to AAPL's valuation assuming 20% growth for 10 years discounted @ 5%.Reply
Air T vs. Apple? Not Even Close [view article]
Ok, you win and Buffett was wrong.I'm going to sell all my stocks and buy APPL and GOOG Reply
Air T vs. Apple? Not Even Close [view article]
Well, if you take a P/E=10 company and assumes 20% annual growth for the next 10 years, of course it will look undervalued at current price.But what are the odds of that happening? Do you think the market is really that inefficient and stupid?
Thus your comparison is bogus. If you want to illustrate the virtue of low P/E stocks, Coach and Starbucks are far better candidates. Reply