Quote:
Originally Posted by Greg McDonald
Virgin Blue shares are going very badly lately. VBA closed today at 0.58...down 4.4% just today and down a massive 18c from mid-March! Thats 23.6% lost value over the last month. 
I know other airline shares aren't going brilliantly but VBA seems to be dropping value at a dangerous rate lately. It would be interesting to know what is driving this dive in value. |
perhaps investors trying to cash in, one thing is for sure they are not exposed to the chaos in Europe, unlike Qantas. Fortunately for both carriers a strong domestic market and the duopoly means both will remain profitable, which is clearly not the case elsewhere around the world be it Europe, Asia or North America where competition is fierce.
My bet on the shares is that it is inevitable VBA will eventually go back past 1 dollar. QAN probably belongs somewhere between the 3.20 - 4.00 mark.
What's more is that as we emerge out of the GFC into better times things will quickly pick up and earnings will improve.
As for explanations for recent falls - possible reasons include upward pressure on interest rates and trend of crude oil prices (regardless of the hedges)
http://www.aip.com.au/pricing/marketwatch.htm