€50k to Play with. Ryanair?

SuperO'B · 07-06-2016 11:54AM #1

Hi all,

Just wondering on peoples thoughts on ryanair shares. Is there still value left in them? I'm thinking of putting €25k into them based on their fuel hedging for the next 2 years compared to this year and in the new planes arriving.

Also, looking at €25k in National Oilwell Varco but they jumped nearly 10% yesterday obviously before I could get my account sorted.

Any advice on the above so I don't lose €50k on my opening trade

Francie Barrett · 07-06-2016 08:08PM

€50k split into two shares in cyclical industries is a little bit risky in my opinion. As much as I like the Ryanair management, I don't really like the business. I think if you have to invest in such a company, the right time is invest is when they're losing money. Right now, earnings are great and the company is trading at an appropriate multiple. Don't know much about your oil company.

iainBB · 07-06-2016 08:16PM

50k to invest.I am super jealous of your capital but your choice in stock is less impressive. what style are you looking for i guess passive long term 2 year what are you hoping to gain at then end?

SuperO'B · 07-06-2016 08:34PM

Francie Barrett wrote: »

€50k split into two shares in cyclical industries is a little bit risky in my opinion. As much as I like the Ryanair management, I don't really like the business. I think if you have to invest in such a company, the right time is invest is when they're losing money. Right now, earnings are great and the company is trading at an appropriate multiple. Don't know much about your oil company.

I completely agree but ryanair hedged their fuel for 2016 at $90/barrel and still made a whopping profit. For the next two years their fuel is hedged at $70 & $60/barrel. The more fuel efficient planes I can only think will add to this along with opening up new routes. Obviously a move to be made after the Brexit vote.

NOV are an oilfield company that supply vast amount of equipment to rigs etc. They've cut massive staff numbers but have large cash reserves and are doing well.

iainBB wrote: »

50k to invest.I am super jealous of your capital but your choice in stock is less impressive. what style are you looking for i guess passive long term 2 year what are you hoping to gain at then end?

My aim is to look at both investments over a 2-4 year term. My thought is that ryanair will grow in value over that period and that the price of oil will gradually rise with the market stabilising, thus increasing the value in NOV. Unfortunately they've already increased by more or less 15% in the last 2 days as I've been trying to get an account set up on a decent trading platform.

Sou would suggest others in lieu of the two above?

Pro Hoc Vice · 07-06-2016 08:39PM

SuperO'B wrote: »

I completely agree but ryanair hedged their fuel for 2016 at $90/barrel and still made a whopping profit. For the next two years their fuel is hedged at $70 & $60/barrel. The more fuel efficient planes I can only think will add to this along with opening up new routes. Obviously a move to be made after the Brexit vote.

NOV are an oilfield company that supply vast amount of equipment to rigs etc. They've cut massive staff numbers but have large cash reserves and are doing well.

My aim is to look at both investments over a 2-4 year term. My thought is that ryanair will grow in value over that period and that the price of oil will gradually rise with the market stabilising, thus increasing the value in NOV. Unfortunately they've already increased by more or less 15% in the last 2 days as I've been trying to get an account set up on a decent trading platform.

Sou would suggest others in lieu of the two above?

So both bets are the same in effect, you are betting on oil rises. The real question I guess is what do you think it will rise to.

iainBB · 07-06-2016 08:42PM

SuperO'B wrote: »

Sou would suggest others in lieu of the two above?

I was just asking myself that question there. I deal with EFT short to long term. in LABU currently making 15% profits.
I would have to research/ look if i had you kind of fund. Sorry.

07-06-2016 08:50PM

SuperO'B wrote: »

......... NOV. Unfortunately they've already increased by more or less 15% in the last 2 days as I've been trying to get an account set up on a decent trading platform.

I'd be slow to buy a share that has increased 15% in the last two days but you'd imagine NOV is on the rise. I wouldn't be looking at it over 2/4 years though, I'd be looking to get out after another 10/15% rise if you get on tomorrow.

Ryanair don't appeal to me, more or less has never been higher and much like PaddyPower most Irish DIY investors have an interest in them. Can't see the current price being much value nor can I see the company growing significantly over the next few years.

SuperO'B wrote: »

......Sou would suggest others in lieu of the two above?

For an investment over a few years I am a big fan of....
https://www.google.ie/?gws_rd=cr,ssl&ei=PTJXV8LtPIiLgAbn4L6IAw#q=hugo+boss+ag+share+price

Their forecast growth has been peeled back significantly but their revenue is solid enough. The likely dividend for the next few years makes it a low risk stock imo of course.

SuperO'B · 07-06-2016 08:53PM

Pro Hoc Vice wrote: »

So both bets are the same in effect, you are betting on oil rises. The real question I guess is what do you think it will rise to.

I work in the oil industry which doesn't mean much when it comes to estimating oil prices. My opinion is that oil will rise to $60 within 18 months and level off somewhere between $65-$70 by 3 years. At that stage the fracking companies will be well and truly back in action however I do think this will be offset somewhat by the drop in production due to the very low levels of exploration being carried out over the last year.

It will take 3-5 years for us to see the result of this. Production we are seeing online now is a result of exploration that was carried out when oil was >$100. We have not felt the effects yet of companies slashing exploration and development projects as a result of the crash in oil price. Rising demand will also have a balancing effect versus the ease at which fracking companies can turn the taps back on.

SuperO'B · 07-06-2016 08:59PM

Augeo wrote: »

I'd be slow to buy a share that has increased 15% in the last two days but you'd imagine NOV is on the rise. I wouldn't be looking at it over 2/4 years though, I'd be looking to get out after another 10/15% rise if you get on tomorrow.

For an investment over a few years I am a big fan of....
https://www.google.ie/?gws_rd=cr,ssl&ei=PTJXV8LtPIiLgAbn4L6IAw#q=hugo+boss+ag+share+price

Their forecast growth has been peeled back significantly but their revenue is solid enough. The likely dividend for the next few years makes it a low risk stock imo of course.

I think this is the attraction with NOV though. They have spiked and then of course they could be viewed over the short term and take out the profits but they also have great long term potential IMO. NOV manufacture and make more or less everything on an oil rig.They were not much lower in price when oil bottomed out at $28/barrel. I just can't see oil dropping to those levels again in the medium term. I would not be in any rush with the stock and believe that oil will go up eventually and hopefully it will bring NOV along with it.

I'll look into your suggestion on HB. Not one that would've sprung to mind I must admit. I'm new to this though.

Francie Barrett · 07-06-2016 09:39PM

SuperO'B wrote: »

I completely agree but ryanair hedged their fuel for 2016 at $90/barrel and still made a whopping profit. For the next two years their fuel is hedged at $70 & $60/barrel. The more fuel efficient planes I can only think will add to this along with opening up new routes. Obviously a move to be made after the Brexit vote.

But what happens with the money that they'll have saved in fuel hedging? I suspect that most of it will just go back out the door in the form of reduced fares.

I think if you buy and hold, you will make money in the long-term. Problem for me is the valuation is a little rich considering the risk.

Cute Hoor · 08-06-2016 11:36AM

Ryanair is a great company, with a great business model, great management (at the moment), and it has been a great little earner for me, BUT, I would caution against investing 50% of your cash in an airline (or indeed any company), there are so many external factors (outside their control) that can impact their profitability and share price.

Good luck!

Roonbox · 08-06-2016 06:21PM

Cute Hoor wrote: »

Ryanair is a great company, with a great business model, great management (at the moment), and it has been a great little earner for me, BUT, I would caution against investing 50% of your cash in an airline (or indeed any company), there are so many external factors (outside their control) that can impact their profitability and share price.

Good luck!

I agree. Airlines profit margin are completely reliant on the price of Crude which is the most volatile Commodity.
i do think its a well run company but you need to bear that in mind.

ballyharpat · 08-06-2016 10:16PM

No offence, but a novice/new investor spreading that much money between two stocks? I really would advise you to do some research and diversify, hedge your bets. Pharma? technology? sure, fire 10% into each of those if you desire…..and even do that immediately if you want, but with Brexit, QE in the EU, as well as the effect of Brexit on the Euro, the US elections, US markets reaching new highs….. I believe its a bad time to be buing in to anything…. I am about 75% in energy, RDS.A, USO, SSL….but I have been in these for a long time, I was down about 40% in total 6 months ago, currently I am up about 12%, I believe there is room for more gains and have a pull out point as well as a place to invest my money When I pull out the bulk, as I do every few years when I reach a good profit…..I prefer property to be able to have a steady income, The stocks have and still are great to me, but they are work…. I don't want to work, I want to make money

09-06-2016 09:59AM

ballyharpat wrote: »

.............and even do that immediately if you want, but with Brexit, QE in the EU, as well as the effect of Brexit on the Euro, the US elections, US markets reaching new highs….. I believe its a bad time to be buing in to anything....

I think a FTSE100 ETF would be safe enough considering the current exchange rate with the €.

I wouldn't touch any $ stuff at the moment.

€50k to Play with. Ryanair?

Comments