nollag

IAG's share price is at 127p at the time of writing, down from the recent highs of more than £6 in Jan 20.

Worth a long term punt at these low prices? I am looking at it for my pension - so thinking about a 10 - 20 year time frame.

Globaliser

There's an old saw about how you can make a small fortune in the airline industry: Start by investing a big fortune in it.

steview111

That £6 you quote was pre-rights issue and has been diluted since then, so if you’re looking at it thinking it’ll return to that level post pandemic, you’d probably be disappointed. The Jan 20 price with dilution taken into account would be closer to £4.

Having said that, the price is low primarily through uncertainty and the outlook is generally positive, despite what the mainstream media will have you believe. But that’s not financial advice

nollag

True - I've heard the same thing said about football teams.

Misco60

IAG has the potential to be a classic recovery stock, but the recovery is not yet clear and the price may yet fall further. It will certainly be volatile until the pandemic is well and truly behind us, and there is no way of knowing how quickly air travel will recover after that. An investment might pay off handsomely but would be a gamble.

mikeyfly

Agree on this one - I think I'd scoop some up if it got to around 100p

Bohinjska Bistrica

Past performance is not an indicator of the future. I bought some RBS shares at a low price (not the lowest they ever went) and never made anything from them. It seemed a good bet at the time but it didn't work.

IAG feels like it should recover and I'm considering buying some shares myself, but you can never guarantee it.

AdBoy

130p now

golfmad

The market must be following this thread

Greenpen

3p increase in that time works out as nearly 6000% per year. Wow, they're taking off!

Raffles

What you need to remember is that IAG has a huge amount more debt in it now than it did in Jan 2020, so the share prices are not comparable.

In very simple terms (using made up numbers):

JAN 2020 - market thinks IAG is worth £10bn with 1bn shares in issue:
Debt = £2bn, equity = £8bn, 1 share = £8

NOV 2021 - market thinks IAG is still worth £10bn:
Debt = £9bn, equity = £1bn, 1 share = £1

The company is still valued identically even though the share price is down 87.5%.

London Dude

It's a gamble. You may want to take a look at what happened to the equity value of United Airlines, which went into Chapter 11 in 2002 in the wake of 9/11. Its shares fell to $0.00, as is often the case with this kind of bankruptcy restructuring.

American Airlines nearly filed for Chapter 11 as well at the time, and bankruptcy was only staved off thanks to late-minute cost-cutting deals with the pilot and flight attendant unions. AA's shares (with ticker AMR at the time) fell as low as $1, and then recovered handsomely after the trade union deals were announced. AMR's price went on to hit $40/share over the next several years. So anyone who bought AMR at $1 when Chapter 11 was almost certain made a mint over the next several years. However AA did file for Chapter 11 in 2011 as a consequence of the 2008 financial crisis, so anyone who had held on to their AMR shares since 2002 would have been wiped out by then. The current ticker symbol for AA is now AAL, and the AA that emerged from Chapter 11 in 2013 is essentially a different company.

Being incorporated in Spain or in the UK, I'm not sure if IAG is allowed to do something similar to Chapter 11, but it's worth bearing in mind that if things get really dire, a total loss to shareholders is a real possibility, even if the airline may not go under and it may still be around and prosper after a few years.

rockflyertalk

If you’re a gambler…IF the data around omicron variant shows the least problematic results and vaccines are affective, I predict (mystic Meg style) shares to rise again. Any bad news, lockdowns etc could well prove worse for short term shareholders. Next summer is another chapter.

nollag

134p today... If only I hadnt shared my get rich quick scheme with you I'd be literally £100 or even £150 richer today!!!

The Geek

My Airline punt would be on a startup. By the time the pandemic is over, the incumbents will be either bankrupt or loaded with significant debt.

Throw in that relatively speaking there are a number of very cheap second hand planes kicking around, and it opens the door very wide for the next Ryanair et al.