The airline holding company IAG revisits its figures for the next few years downwards. In September the group that integrates Iberia, Vueling, British Airways, Aer Lingus and Level already announced a 'profit warning' for the financial blow of the strike of British Airways. This is just some of the news that the airline has generated in recent years and that has led to volatility in the conformation of its prices that has risen much more than in other periods. With some very important differences from one trading session to another. As a differentiating element with respect to other values of the Ibex 35.
In either case, the airline has become one of the most active securities in recent months. For several news of which he has been a clear protagonist in these days and that he will surely be one again in the next few days. This is what small and medium investors call hot values because many titles are moving from hand to hand in these weeks. Although without a very well defined background trend, at least intended for the short or medium term. Therefore, the effects on purchases are not entirely clear.
In another vein, IAG is a security that is closely linked to the evolution of the price of crude oil. This fact causes its volatility to be even higher than in other cases of the selective index of national equities. In the sense that their fluctuations are very strong and can reach divergences in their prices that undoubtedly can reach up to 5% or even more intensely. To the point of being one of the securities preferred by the traders to carry out its operations on the stock market. Although this time it is necessary to adjust the entry prices very well in the security positions.
IAG: in search of the 8 euros
This is the great objective of the airline, at least in the medium term. At a time when it is trading slightly above the levels of 6 euros per share. Of course, after having traced their positions from the 4 euros in which it was a few months ago. That is, in this period it has revalued by just over 30%, one of the best behaviors within the Ibex 35. Although there may be serious corrections before the end of this quarter and that may constitute an opportunity to buy their shares by presenting more competitive prices than at the moment.
While on the other hand, it is also characterized by its vagueness when it comes to positioning In some kind of background trend that is somewhat consistent and does not try to mislead small and medium investors. In what constitutes one of the hallmarks and by which we can more clearly identify this value of Spanish equities. On the other, it has a very important revaluation potential, especially if it is accompanied by a notable rise in the price of crude oil. Which is at the end of the day one of its main objectives from any kind of strategy in its management.
Good growth potential
Of course, this value has a growth level since its target price is very close to the 8 euros per share. From this point of view, it would still have a long way to go and could now be used by small and medium investors. With significant possibilities of making the savings profitable, but for the same reasons, leaving a lot of euros on the road. Although one of our goals is above all the preservation of the capital invested in these positions in the equity markets. With the risks that this kind of operations entail that we can carry out from now on.
Another positive aspect of this value in the air transport sector is that it is being highly recommended by financial intermediaries. To the point of one than one of the securities selected to make up our investment portfolio for the next few years. And that in all cases, it can be a reference source to start a new investment strategy with which to obtain significant profits in each of the operations. Beyond another series of technical considerations and on any kind of strategy in its management.
Brexit pending
Anyway, everything is at the expense of what may happen in the United Kingdom and its well-known Brexit. To such an extent it is an important fact that its resolution can lead IAG's securities on one or another trend in the equity markets. Good to approach up to 8 euros or on the contrary to revisit the levels of 4 euros per share. In this sense, the most practical thing is to wait a bit to see what can happen with this fact that has undoubtedly been conditioning the European stock markets in recent months. Although its negative impact has not yet reached the title parks.
On the other hand, any positive resolution on Brexit would have very beneficial effects for the company's shareholders. Since they could see how their shares are revalued from that precise moment. With a buying pressure that would clearly impose itself on the seller and that could lead to the profit and loss account of stock market users to grow with great intensity. This is one of the scenarios that can arise in the coming months and which you have to be very attentive to from now on.
Increase in dividend
One of the facts that its shareholders liked the most is that this year the dividend they distribute has increased. To the point that at the moment its profitability is already very close to 7%. Being in any case one of the most profitable of the Ibex 35 for this concept since users are guaranteed a fixed and guaranteed payment every year. Whatever happens in the equity markets as they will have a portfolio of fixed income within equities as part of a very original and innovative strategy to make their savings profitable from now on.
While on the other hand, it should be noted that IAG's actions are very conducive to carrying out very fast operations and having liquidity in the savings account. Like its option to outperform some of the more traditional proposals in the national equity markets, such as BBVA or Banco Santander. In any case, it is a very interesting option that must be put on the radar in the coming weeks.
Although with a very clear lack of resolution due to the special characteristics of this value of the Spanish stock market. Where it is not very clear where their movements can come out, if upwards or on the contrary by retreating to tighter positions in their daily prices. It will only take a few weeks to see the rumor of IAG's shares.
Purchase of Air Europa
It is for the moment another of the latest news that this international aviation company has been subjected to. Because in effect, IAG announced last week the purchase for a total of 1.000 million euros of the national airline Air Europa, integrated until now in Globalia, with the aim of increasing its market share in trips between Europe and South America and the Caribbean. The investment for the next three years increases to 4.700 billion euros on average per year compared to the 2.600 billion euros it had previously promised.
Air Europa is one of the main private airlines in Spain, operating regular domestic and international flights to 69 destinations, including European and long-haul routes to Latin America, the United States of America, the Caribbean and North Africa. In 2018, Air Europa generated revenues of € 2,1 billion and an operating profit of € 100 million. It carried 11,8 million passengers in 2018 and ended the year with a fleet of 66 aircraft.
In this sense, the IAG board considers that the transaction will increase the importance of the hub de Madrid de IAG, transforming it into a true rival for the Big Four hubs Europe: Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle. At the same time, it will unlock network growth opportunities and re-consolidate IAG's leadership in the South Atlantic. So that in the end it brings significant benefits to customers by providing more flexibility in schedules and options as well as more opportunities to earn and redeem miles. Where the Economic data seems to be increasingly negative, but it may be that it is already discounted in the equity markets.