Share Analyser


Since this site is intended to be about wealth creation, we thought it would be helpful if we analysed a few shares every week. This will be done on shares listed on the JSE (Johannesburg Stock Exchange), primarily using classic value techniques as we believe this is the best path to wealth creation. Hopefully, we will be able to price shares accurately, but ultimately, the decision to buy or sell the share will be made by you. What we aim to do is provide you with the information you require in order to make your decision. There are a number of shares listed on the JSE, so let's do what Buffett says and start at 'A'.

Share - 1 Time Holdings Limited

JSE share code: 1TM
Well, technically, it's not 'A', but it's at the start so this will be the first share I analyse.

Company Profile: "1time is a diversified aviation group with the following focus areas: an airline, an aircraft maintenance business and charter business."


Key information (as at 24 May)
Website  http://www.1timeholdings.co.za
Closing Price  110c
12 Month Low  36c
Date of low  28 May 2009
12 Month High  144c
Date of high  20 Jan 2010
PE (Price to Earnings) ratio  2.80
PE based on 3 year average earnings  15.22
Dividend yield  0%
Market Capitalisation  R 231,000,000
Shares in Issue  210,000,000
Net Current Assets[1]  R-251,469,000
Net Asset Value (NAV) per share  49.96c

It's clear that this share doesn't fall into the 'Bargain' bucket as Graham defines it in terms of net current assets. The company has much more liabilities than it can afford to pay off with it's current assets. In fact, the current liabilities are about 46% higher than the current assets which may mean that the company could face further liquidity problems in the future. 1 Time Holdings (Ltd.) does however have a large amount of fixed assets. Since it is an airline company, I suspect that most of the fixed assets (about half) are aircraft which, I believe, depreciate quite rapidly. So far, except for the most recent PE of 2.8 which is quite attractive, the company doesn't have any other desireable features as far as a good investment goes. Also, the fact that it listed in 2007 means that there's not much data and financials from which to estimate and kind of long-term performance.
Overall, the company's cash flow from operations have been positive since it's listing, and the earnings have been negative only once so far since listing and that was in the 2008 financial year, which coincidentally was the year of one of the worst financial crises in history. The full year earnings were not negative since listing which I believe is quite an achievement for an airline company, but then again, 3 years history is not much to go by.

Conclusion - It may just be my personal bias against airline companies, but at a price of 110c per share, I do not see sufficient upside potential in this share to justify investment in it2. Perhaps if the price drops significantly below 49c or the earnings rise at a suitably stable rate over a long enough period of time without the price rising too high, then this would be a sensible buy.


Remember, if you have any comments, questions, suggestions etc., please send them to jayant_ramjee@yahoo.com.

1I define Net Current Assets to be current assets less total liabilities as in "The Intelligent Investor" by Benjamin Graham. Conventionally, Net Current Assets is defined as current assets less current liabilities.
2Note, that this does not mean that the share won't go up, just that I believe the risk of the share falling is too high to justify investment in it at this price.

Custom Search

Version : May 31, 2010
   Disclaimer    Terms of use    Privacy policy