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08.07.18 09:18
Motley Fool
For more than a year, the stock of Lufthansa (WKN: 823212) has rallied, as is rarely seen in the DAX. In October 2016, the stock rose to just over 9 euros at the time of purchase shortly before Christmas 2017, then it temporarily changed hands for more than 31 euros.
Since then, she has gone downhill. Friday, even the note of 20 euros was briefly under-rated. For a year, the rally is completely exhausted. I think a lot of complex factors come together here. If you focus on one of them alone, you risk misjudging the share of Lufthansa
No matter if the title is negotiated at 20 or 30 euros, both prices are visually extremely cheap. With a profit of 5.03 euros per share over the last year, it has a very low one-price price-to-earnings ratio
Apparently market participants were cheap but not cheap enough, otherwise they would not have the stock missed a loss of value of a third. Anyone who knows Lufthansa's share because these fluctuations are not new. The stock has fallen for decades after each promising rally.
The title is currently worth less than the highs achieved in the late 1990s, and the higher prices in late 2016 and early 2017. The pattern has always been a short break in the last 20 years for then go down to about 10 euros.
This badysis is, of course, detached from the basic data and says nothing about operational development. What investors need to understand, however, is that if the last rally turns out to be an irrational price jump in hindsight, there are plenty of precedents for that. Perhaps Lufthansa, as an badysable society, has characteristics that can be used to develop an unsustainable euphoria.
The industry is still favorable to unpleasant surprises
Lufthansa action seems to have some reasons to give. To put it in abstract terms, it looks like the industry is always good for nasty surprises. Concretely, however, it is possible to filter two main factors.
On the one hand, Lufthansa, like all airlines, is suffering from rising oil prices. These have been steadily increasing for a year, and Lufthansa's operating costs are steadily increasing. This depresses the expected profits and discourages many investors.
The price of oil may not be so important in the long run. There is absolutely no production capacity in the world, so we can badume that price increases have clear limits. In addition, the latest aircraft models are much more efficient than they were before, making airlines more independent of oil in the long run.
More serious, in my opinion, are the many fundamental flaws that are now appearing in the aviation industry. It does not seem to be a coincidence that this summer in Germany and Europe in the air traffic on it. Overcrowded airports, lack of specialized staff in many areas, lack of pilots and many others are the causes. These are negative factors you have not been expecting recently.
Warren Buffett caused the wave of euphoria
Once again, in the aviation industry, it was felt to have reached a state normal. the next problems appeared. This is precisely the reason why investors often avoid the airlines and are often traded for attractive valuations.
We must not forget that Warren Buffett did a great job at the last rally in the United States with his entry into the United States. Airlines have given rise to a renewed euphoria. Yet his logic applied to Lufthansa is still intact. He argued that he sees the perennial and hard price struggles of US airlines have slowly ended. This could also apply to Lufthansa, because after all, there has been some bad news recently regarding certain operating conditions, but the competitive situation at the scale of the industry s & # 39; 39 is substantially improved.
Based on its rating, Lufthansa has at least the potential to become a good deal
Is Lufthansa really the best DAX opportunity?
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Marlon Bonazzi does not own any of the shares mentioned. The Motley Fool does not own any of the mentioned actions.
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