In my previous posts I did my regular growth numbers analysis. In this post I will compare them. I’m interested in finding the strongest airline company which I can buy through my broker. Finnair, Lufthansa and Norwegian are interesting to me.
The airline stocks have crashed. Warren Buffet solds his awhile back. Will the airline business go back to normal? I believe so. I just don’t know when and which companies will survive.
I believe people are eager to travel again.
Here in Sweden everything seems to be back to ususal. As if the pandemic didn’t affect us. The public transports are stuffed with people. Even more than usual during holiday months. I would estimate that less than 10% wear facemask on public transports. It’s not mandatory here.
Meanwhile the pandemic rages in some parts of the world while the American stock markets have reached new All-time-highs.
Previous posts
Numbers analysis: Deutsche Lufthansa AG
Numbers analysis: Norwegian Air Shuttle
Numbers
| ROIC | Sales | EPS | Equity | Cash Flow | |
| Finnair | 3 | 3 | 3 | 5 | 8 | 9 | – | -4 | -30 | 1 | 7 | 5 | 29 | 35 | 12 |
| Lufthansa | 9 | 12 | 6 | 4 | 3 | 2 | 0 | -9 | -44 | 2 | 15 | 7 | 3 | 4 | -2 |
| Norwegian | 1 | 1 | 0 | 20 | 18 | 8 | – | – | – | 10 | 9 | 142 | 16 | 7 | 556 |
Growth rates (%) for 10 year average | 5 year average | 1 year average
| Finnair | 1145 |
| Lufthansa | 2642 |
| Norwegian | 32629 |
| MCAP | Price | Fair value range | MOS range | Debt (%) | |
| Finnair | 638 MEUR | 0.55 EUR | 0.27 – 3 | 0.14 – 1.5 | 41 |
| Lufthansa | 4766 MEUR | 8.40 EUR | 3-4 | 2 – 2 | 24 |
| Norwegian | 4961 MNOK | 1.3 NOK | n/a | n/a | 71 |
My take
I do expect people to start travel again. If the tide change and air travel somewhat return to “normal” it couble be a good bet to speculate in airlines companies. It is very risky though and the risk of bankruptcy is high.
My take is that Lufthansa seem like the safer bet with a good historic ROIC, positive EPS and 24% debt. It’s near a multiyear support at around 7.5 EUR. However it is not even near it’s fair value. If the pandemic doesn’t get under control and there is panic in the stock markets the stock could go lower.
I bought a minifuture with 3x leverage of Lufthansa for my longterm portfolio. A small (1% of total portfolio) bet. Stop loss just below support. If I stop out I will look to reenter if it reclaims previous support.
