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What gives?
What the heck is going on with Air France?
AKH seems to be dropping like a brick this week. But why? Looking at the numbers, a $34 stock price just doesn't make sense. At $34/shr, AKH is valued at $9B, and the net assets are $10B. Yahoo! gives AKH a book value over $40/shr. Earnings are estimated (again by Yahoo's figures) to be 4.7 and 5.2 bucks a share for 07 and 08. And this is revised up from 4.3 and 5.1 over the last two months, while the stock is down from $50 to $34. So if it's worth $40+ in cash, and they'll make another $10 in two years, how does the market value AKH at $34? Anyone ride Air France lately, and think they'll be out of business or something in a few years? Is there a plot to hijack Air France planes that only a few powerful hedge funds know about?
I'm thinking about adding to my AKH position, but I want to make sure I'm not plunging more into a potential MFLX or BEL situation, where they bite off more than they can chew, say with an acquisition of a poorly-run Italian airline or something silly like that. Does anyone have an opinion on the potential Alitalia merger? Is that likely to happen, and would AKH benefit?
What the heck is going on with Air France?
AKH seems to be dropping like a brick this week. But why? Looking at the numbers, a $34 stock price just doesn't make sense. At $34/shr, AKH is valued at $9B, and the net assets are $10B. Yahoo! gives AKH a book value over $40/shr. Earnings are estimated (again by Yahoo's figures) to be 4.7 and 5.2 bucks a share for 07 and 08. And this is revised up from 4.3 and 5.1 over the last two months, while the stock is down from $50 to $34. So if it's worth $40+ in cash, and they'll make another $10 in two years, how does the market value AKH at $34? Anyone ride Air France lately, and think they'll be out of business or something in a few years? Is there a plot to hijack Air France planes that only a few powerful hedge funds know about?
I'm thinking about adding to my AKH position, but I want to make sure I'm not plunging more into a potential MFLX or BEL situation, where they bite off more than they can chew, say with an acquisition of a poorly-run Italian airline or something silly like that. Does anyone have an opinion on the potential Alitalia merger? Is that likely to happen, and would AKH benefit?
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