Can SIA break $8 again?
A month ago on 16 Jun 2023, we saw $SINGAPORE AIRLINES LTD(C6L.SI)$
It has been a rollercoaster ever since 🎢
SIA price before market opened this morning
2023: The Rise of SIA
No one really doubted SIA's ability to bounce back once travel reopened. The only question people had was — how much?Image 1: Data extracted from SIA operating statistics from FY2021 to latest report of May 2023 statistics; visualization done on Tableau Public
Operating statistics since FY2021 clearly show both an increasing passenger load factor (i.e. % of available passenger capacity filled, seen by the narrowing of the gap between the two lines in Image 1) as well as an increase in supply (available seat-km), suggesting that SIA anticipated correctly the increasing demands from the consumer.
This narrative seems to hold true up till early 2023. However, stock price seemed slow to adjust for this and struggled to break $6.
Image 2: Data taken from yahoo finance; combined with data from SIA operating statistics and visualization done on Tableau Public
That all changed in May 2023. Around the time when SIA was announcing its FY2022 annual report, the price started appreciating... and it didn't stop 🚀
As if making up for lost time, you can see the steep increase in price relative to the trend line of Revenue Passenger-km, which is the operating metric SIA uses as a proxy for revenue (labeled Occupied Seat-km in the Image 2).
Overbought, or buying the future?
Last month I wrote about SIA being overbought, and based on Image 2 that seems the case. Revenue Passenger-km growth seems to have met some resistance in FY2023, and if growth continues to stagnate, then SIA's price might end up being an overvaluation.
That said, we have yet to see June's statistics (estimated to be released this week), which is traditionally a more active month for travel. June and July will be crucial for cementing the growth narrative, or confirming the opposing bearish narrative.
Uncertainty = opportunity. I'm more inclined to the bearish narrative. After all, Warren Buffett once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.”
Credits
I want to thank and introduce Tableau Public, the tool that I used to generate the visualizations. The Tableau product has been acquired by $Salesforce.com(CRM)$ , and while its Pro/Enterprise licenses are behind paywall, Tableau Public is a cloud-based service that's free to use!
While Tiger is a great app for analyzing stock data, if you wanna do analysis across other non-stock related datasets, you can consider using Tableau Public!
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$新加坡航空公司(C6L.SI)$ 's recent financial results and the positive outlook for the airline industry suggest that it is possible that SIA stocks could break $8 again.
Ultimately, whether or not SIA stocks break $8 again will depend on a number of factors, including the company's financial performance.
$新加坡航空公司(C6L.SI)$ has been reporting strong financial results, and the outlook for the airline industry is positive.
The company's recent financial results and the positive outlook for the airline industry suggest that it is possible.