stock hitting new year high today
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Flightlevels
- Rank 7
- Posts: 703
- Joined: Sun Feb 29, 2004 7:16 pm
stock hitting new year high today
Wow new high today on the stock..wonder what's up. Heard something coming down the pipe in the charter area due out soon.
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Snow Monkey
- Rank 3
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- Joined: Fri Apr 09, 2004 5:24 pm
- Location: south of 60
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Machiavelli
- Rank 4
- Posts: 201
- Joined: Mon Apr 04, 2005 2:53 pm
4) all the above.
Here are some simple calculations to consider when estimating WestJet's future share price:
A)WestJet price-to-earnings ratio has a historical average of 32. Low cost carriers, if you most lump WestJet in with anyone, trade between 22 and 24. The entire TSX trades somewhere around 17. One could argue from the low end of 17 to the high end of 32 until one's blue in the face so I'll arbitrarily use 20X because it makes for easy math.
B)WestJet has earnings of $0.69/share for the fiscal year and it breaks down like this: Q4 (2005)- $0.01, Q1- $0.10, Q2- $0.17, Q3- $0.41 Nobody thinks WestJet will do $0.01 in the fourth quarter of 2006 like they (we) did in the fourth quarter of 2005. The street says $0.13. So, the street guesses $0.80 for 2006. $0.80 X 20 = $16.00
C)If we do better than $0.13 then the shares should go up accordingly. Worse, and of course vice versa. Consider that historically Q4 and Q2 have been roughly equal in their contribution to the bottom line and in Q2 '06 we paid $15.5 million to settle with you-know-who and still did $0.17. It doesn't take much to figure the actual number could be closer to $0.25. Personally, I think $0.90-$0.95/share for 2006 is not out of the question. Apply 20X and we're talking $18+ for WJA.
Here are some simple calculations to consider when estimating WestJet's future share price:
A)WestJet price-to-earnings ratio has a historical average of 32. Low cost carriers, if you most lump WestJet in with anyone, trade between 22 and 24. The entire TSX trades somewhere around 17. One could argue from the low end of 17 to the high end of 32 until one's blue in the face so I'll arbitrarily use 20X because it makes for easy math.
B)WestJet has earnings of $0.69/share for the fiscal year and it breaks down like this: Q4 (2005)- $0.01, Q1- $0.10, Q2- $0.17, Q3- $0.41 Nobody thinks WestJet will do $0.01 in the fourth quarter of 2006 like they (we) did in the fourth quarter of 2005. The street says $0.13. So, the street guesses $0.80 for 2006. $0.80 X 20 = $16.00
C)If we do better than $0.13 then the shares should go up accordingly. Worse, and of course vice versa. Consider that historically Q4 and Q2 have been roughly equal in their contribution to the bottom line and in Q2 '06 we paid $15.5 million to settle with you-know-who and still did $0.17. It doesn't take much to figure the actual number could be closer to $0.25. Personally, I think $0.90-$0.95/share for 2006 is not out of the question. Apply 20X and we're talking $18+ for WJA.
