Edited 7d ago
SIA (SGX: C6L) share price up by 8.9%!!
After Singapore announced the expansion of the Vaccinated Travel Lane scheme to more countries, this happened this morning. Anyone bought the dip before? Or holding SIA shares? Should I just take profit and sell now?
Hey anon, I think what both jo and Kenneth said makes sense.
I think you need to ask yourself what was the investment thesis you had in mind when you bought into SIA. Was it a deep value play? or was there something else you saw in the company?
If it was pure speculation, then it might make sense to exit given the sudden price hike. Just like what Jo said, airline companies are indeed cyclical in nature and because air travel is commoditized, it's very hard for airlines to have pricing power. Coupled with high CAPEX and operating expenses, it's a very tough business to be in given the covid situation.
Indeed, the world is slowly opening up but I don't think air travel will ever be the same again. Even if it is possible to go back to pre-pandemic times, I think it will still take some time.
Of course, you would have to make the decision to hold or sell ultimately! I hope this helps!
Disclaimer: Please do carry out your own due diligence before doing anything. This is just my opinion and not a recommendation to do anything. I am not a certified financial advisor.
If I were you, I’ll gladly take an exit position right now. Like what Kenneth mentioned, the spike in share price is likely temporary & probably due to the recent news of VTL. Air travel is FAR from recovery to the pre-pandemic levels.
I don’t like airline companies because of their cyclical nature which is subjected to volatilities like another pandemic or a recession. You’re also directly impacted by global jet fuel prices.
Anyways, looking at the share price won’t tell you anything about their business model & financials. Prior to COVID, SIA already has high operating expenses, consistently negative cash flows without a competitive moat. The pandemic has incurred even more debt for SIA, which I think will take quite some time for them to pay off.
Taking into consideration the opportunity costs and red flags, I’ll exit and run already haha. Just put into S&P also better.
Even before COVID SIA has been a poor investment for long term share holders.
I see that you select...
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