There is nothing that traders like to see more than a good comeback story. They rarely occur, but when they do you can be sure that someone somewhere is about to become rich. If it is a good growth story you’re after then odds are you are going to find it within the airline sector. With the likes of Ryanair and Easyjet emerging from the shadows to reinvigorate investor’s portfolios, it is no surprise that the sector is becoming a must watch market. Even though the aforementioned two are doing well, arguably no comeback has been more impressive than that of International Consolidate Airline Group (IAG) and IAG shares.
IAG in its current form started life in 2011 and was expected to wipe the floor with competition. British Airways and Iberia are the flag bearing airlines in Spain and the UK, but as plans will be plans will go awry. The company struggled under the pressure and clearly lost its way during the restructuring process. Their losses actually reach frightening levels during 2011; leaving analysts and investors concerned about what the future held for IAG shares. Those in management positions within IAG clearly didn’t share those same concerns.
It was clear that restructuring was going to play a key part in how IAG moved forward as a new entity. As any company that has restructured will tell you, it isn’t a cost free process. IAG paid big to get their ducks in a row, especially when it came to Iberia. But since then the tide has turned, from summer 2012 onwards IAG and IAG shares have been on the comeback trail. Between then and 2014 IAG shares have grown by 30%. When you look at such stat it would be positive for a well-established brand, but when you consider that it is coming from a brand that is still “in recovery” it is very impressive. Two years of impressive forecasts lie ahead for IAG shares, as they near the end of their self-proclaimed recovery period. By 2015 their P/E could be as low as 6, but dividends aren’t being foreseen for a while yet.
Never before have investors had so much choice when it came to the airline sector, with the market having firmly restabilising itself within the London Stock Exchange. The stock leading the way through its very own comeback story is IAG shares. In 2011, the company was almost written off completely for what was a disastrous twelve months. But as history has shown, many analysts spoke too soon and by the end of 2014 it was clear that IAG shares are back and quite possibly back for good. Mergers are a tricky business, but those who stuck by IAG shares saw that when it is the handled the right way, there is light at the end of the tunnel. When you talk about IAG shares, you are talking about one of the London Stock Exchange’s greatest comeback stories.
Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.
Alexander Bowring is a London based writer and a Southampton Solent University Screenwriting graduate. He has worked alongside TV personality and Telegraph feature writer Alison Cork, whilst also having produced content for ITV, This Morning, Canvas8, Who’s Jack, Alison at Home, and Bonallack & Bishop Solicitors. Alexander also has a keen interest in investments.