Dart Share Discussion Threads

[wagnerlove] 20/12/2018 11:06

Snorkel - I am calculating using forward EV/EBITDA based on full year results. In 2016 right after Brexit vote share price hit around 500p, or market cap of £745m, and later that year a low in October of 361p, or market cap of £537m.

Results in July 2017 showed EBITDA of £190m, and net cash of £168.5m. So £745m of market cap, minus net cash of £168.5 = EV of 576.5m. (I am not adjusting for operating leases, but these are not massive most planes are owned). Divided by July 2017 EBITDA of £190 that was forward EV/EBITDA of 3X in August 2016, and 2X at the October low in 2016.

Today, Dart has market cap of 1.1bn. Estimates for this years EBITDA in July 2019 results is £327m, and year end net cash of £300m. So, that gives us a forward EV/EBITDA of 2.4X right now - bang within the post-Brexit 2016 range.

[snorkelparker] 20/12/2018 10:38

WL,

What numbers are you using to calculate EV/EBITDA now ? full forecasted 2108/19 or at the half year ? As the Brexit low had both summer and winter in the numbers.
Just interested in how you established a like for like comparison based on seasonality
SNK

[wagnerlove] 20/12/2018 10:37

PS Tongo: if you are going to reference concepts like "Mr Market" on here, you should really bother to do the reading and understand them. Ben Graham coined the phrase to describe taking advantage of the irrationality of the market to buy bargains when price gets out of synch with intrinsic value. He is NOT talking about following the daily movements in a share price as telling "the truth" about the long-term value of the shares. From Graham:

"...Imagine that in some private business you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly. "

"If you are a prudent investor or a sensible businessman, will you let Mr. Market's daily communication determine your view of the value of a $1,000 interest in the enterprise? Only in case you agree with him, or in case you want to trade with him. You may be happy to sell out to him when he quotes you a ridiculously high price, and equally happy to buy from him when his price is low. But the rest of the time you will be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position."

[wagnerlove] 20/12/2018 10:25

Tiger - very interesting news about Primera planes. Meeson is at his best when buying second hand aircraft. He has in the past created huge value this way. For context, on an EV/EBITDA multiple Dart is trading near the lows it hit just after Brexit vote. Of course, anything can happen short-term with the share price, but shows where we are. As has been said, very little premium in the shares, which are trading at small premium to book value. BTW - Cenkos recently bought Smith & Williamson which means it takes over as one of Dart’s house brokers. They have analysts, so there will be three covering company next year if Dart keeps them on.

[castleford tiger] 20/12/2018 09:49

agree snorkel or in a propery company that will have massive falls in NAV at next results.

ASOS/BOO HOO/FEVERTREE all have got massive valuations

Tiger

[meijiman] 20/12/2018 09:10

When household budgets are under pressure one of the last things to 'go' is the family holiday. Some might switch to UK but many will go to the sun.

[snorkelparker] 20/12/2018 08:45

Now i would be VERY worried, if we where at double figure earnings multiples and not just a few hundred million pounds from NAV.

[snorkelparker] 20/12/2018 08:41

Are we in the start of a deep and prolonged recession or the end of a correction ?
It's very difficult to make that call, even the so called experts sit either side of this argument.. so who are the likes of us to have a proper handle on things.
no point going backwards and forwards as i do understand your macro points, maybe knowing a lot about dtg has in this case been detrimental. My plan was to unload most after the results and sit out the Brexit fiasco but missed that play. But at these current prices its difficult to make a call. Sure a rolling bear market and perceived disastrous BRETIX would spell pain. But if an Brexit agreement is reached and the US markets stablise then sure it's a different story.

[tongosti] 20/12/2018 08:19

SPCollapsing oil prices have coincided with equity indexes collapsing as well. As you correctly pointed out is demand driven and it is in this context that I was making my comment. Brexit is certainly having an impact on DTG but is secondary at this stage, in my view. My point is that it is the bear market which is finally here and is giving an extra push to DTG. As NY was closing yesterday I wrote on this board saying European markets would pick up where American equities left off. Hardly a rocket science and this is indeed what's happening. DTG is not 2.5% down on the open today not because of Brexit but because of wider markets collapsing. DTG is in a cyclical industry and hence the v high sensitivity to broader market downswings.

[snorkelparker] 20/12/2018 06:36

If 2018 quota represents worse case then at least its known and can be factored in as a possibility .. they maybe a positive that can be taken, if demand holds up and supply tightens ..would that take load factors up, possible increase prices, sometimes these events have unexpected consicenses..but for the likes of tcg and flybe will be a lot more painful. Another thought was the likes of travel companies like OTB, what would they happen if due to limited seats on there airline partners, seats became unavailable ..

[snorkelparker] 20/12/2018 03:28

EU bulling tactics, enough flights next year "2018 quota" to maintain their tourist industries but a clear message that they intend to make a point.. rather unpleasant fellas. But wonder what is going to happen to all the additional capacity coming on line, guess return wet leases and utilize own aircraft in the case of Jet2, push non EU routes..But its not good with so much growth planned if it goes go worse case

[shaker44] 20/12/2018 00:55

I am out. No point reading this board now.
Advfn have lost control of the kindergarten.
Let the children play

[tongosti] 19/12/2018 21:31

Someone's really confident in their fundamental analysis (!)Big trip south for US indexes post Fed. Expect DTG & co to pick up first thing tomorrow morning.

[tsmith2] 19/12/2018 19:17

Gotham are shorting DART?

[11023154] 19/12/2018 19:03

whats the target snorters?

[tongostl] 19/12/2018 18:38

EU have stated that under a No Deal Brexit, British flights from the UK to Europe will be allowed to continue as normal. This is great news guys, back to 1500p shortly. Time to BUY SOME MORE :)

[aneeda avadump] 19/12/2018 18:34

Wace, with thanks to Gotham, have started shorting this share

[woozle1] 19/12/2018 18:23

Got to credit Tongo with the imaginative name for his aliases!
w1

[aneeda avadump] 19/12/2018 17:35

This share looks like it's in financial trouble

[joe king1] 19/12/2018 16:32

Most AiM going down the bog, this pile of poop has been let off the hook, until now.

It's got 100p written all over it, but fair value is really 50p

[tongosti] 19/12/2018 16:26

Alternative reality interpretations (they know who they are) translate unfavourable price moves as "meaningless noise". Enough with DTG for a bit - all eyes on the Fed's decision in a few hours!

[joe king1] 19/12/2018 16:19

price is not looking very good