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Omega Healthcare Investors Inc. Message Board

  • Need_High_Yield Need_High_Yield Jun 15, 2005 1:08 PM Flag

    To the old timers here

    While I haven't posted her in a while, I still have been checking in and reading the messages.

    However, for the first time in many, many years, I no longer own even one share of OHI. Seems kinda strange, like losing an old friend since OHI was very, very good to me. :-)

    My last OHI buy was in May of 2004 at $$8.75, after a sizable drop if I recall, and I was sold out today at the open.

    Was especially nice to get $13.45 when my GTC limit order was set at $13.00. I placed it shortly after holding OHI for 12 months to get a L-T gain. Only wish I had bought more but with a 50%+ gain in 12 months, I'm not complaining. :-)

    Out of OHI but I will still be checking in here. There are some great posters here and much fewer jerks than seen on most boards nowadays, although I haven't seen the latter here lately at all.

    Good luck.

    Regards,
    NHY

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    • "Codehead - I actually disagree with your assessment. No one company has an advantage over another when it comes to sending a package. I guess the only real competition is the post office that would not be as affected by oil prices. When packages must be sent -- if it costs 10 dollars or 11 because of oil --it still will be sent. So I see little elasticity from prices."

      Humvee,

      I wasn't indicating that any company had an advantage over another. I was actually indicating that they were all in the same boat. I.e. that they all faced hire oil prices which will affect demand. Note that another posted says that DHL is not susceptible to oil prices.

      Prices always affect demand. I believe there is more elasticity but I am not an academic in this area. Off the top of my head (from economic courses 20 years ago), here are some reasons why demand can be affected.

      1) Not all packages that are sent by these services MUST be sent by using these services.
      This type of demand can be crucial. After a carrier reaches the break even point, packages sent are after that point are essentially pure profit.

      2) Businesses are always assesing cheaper ways to send packages. I am in business and everytime we send something out, we consider whether it has to go over night or not.

      3) If oil continues to go up, opportunists will enter the market. Railroads and trucks, I guess. Maybe it will pay better for airlines to fill unused baggage space. Not sure if trucks can compete with plains.

      4) Some packages just won't be sent. I just mailed some stuff across the country last week. If the mail cost was more than it was worth, I would have told my nephew, "tough luck".

    • access to debt to do for 2 years...Not impacted by fuel cost like other air frt.

      What about FDX and UPS in this area.

      See how well LUV is doing because of such..or at least not negatively impacted like AMR.

    • ABXA is not exposed but you kind of have to look at ABXA and DHL as a single economic unit with regards oil. If expenses rises, then DHL will be in the same position as the other companies. Expenses will be passed on to the customers and demand will be affected. All things being equal, if demand is reduced then ABXA's services will be in less demand.

    • great investment.

      Has anyone seen the FT article in the fall in air cargo - obviously this is being fueled by higher oil prices. I think a number of the players in this area are going to be adversely affected, especially if they're exposed to fuel costs.

      Fortunately, ABX Air (ticker: ABXA) is not one of them. They have a cost-plus contract with DHL such that all the additional costs are passed on to them. I don't know if the same is true for FDX and UPS - I tend to think they're exposed.

    • KMPG you buying more NTO at these levels?
      Curious if I should add more and look to retire. =]

      e

    • I believe KPMG is indicating that Index funds will need to buy ABXA common so that their funds will match the Russell 2000. Otherwise, their funds will be missing a company that is included in the Russell 2000.

    • KPMG is a man of few words. Sometimes I wish he would explain things a little better. Indexers have to match doesn't really tell us newbies much. Just my thoughts.

      But thanks anyways. I wish I could buy more but will hold the 500 I have long.

      e

    • held by institutions...why 4 million?

      thanks,

      Holding over 30k shares.

    • This from the Airline Business Report:

      "ABX Air ... did a lot more business in the first quarter. The number of packages handled totaled 160.6 million, a 30.8% increase compared to first quarter 2004 volume. Under agreements with DHL Express, ABX Air has the potential to collect revenues from an incremental mark-up each quarter based on cost-related goals. During the first quarter of 2005, ABX Air earned $0.6 million or 46.5% of the maximum incremental quarterly markup. DHL is making a significant investment in ABX Air's main Ohio sort hub and in several of its regional hubs."

      My comments on this: Currently ABX is trading at 11.6x fwd earnings (using a conservative estimate), yet the recent package growth of 30.8% suggests that there's a lot more potential for growth than this multiple would suggest. There's excess capacity in the planes, so I'm not saying it should trade at a 30x multiple or anything, but there's not such a large amt of excess capacity that 30% package growth could be supported for a number of years without adding capacity in the future. These expansion costs would be borne by DHL, suggesting there's substantial potential for increases in return on equity. Is the 30% growth sustainable? I think so, because DHL is starting with such a low base in express market share. Now, they're not aggressively going after market share by sacrificing quality, but improving quality is precisely what will get people to switch, thereby increasing market share.

      In short, I view ABX as a cheap way to play DHL's growth, since DHL isn't publicly traded. The stock has come a very long way since it split off from DHL, but I believe it has further to go still.

    • Yes ABX Air is being added to the Russell. Go to Russell's web site and look for the reconstitution information and you'll see it as being an addition this year.

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