Author Topic: AIM.TO - Aimia  (Read 86799 times)

Sunrider

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Re: TSX:AIM - Aimia
« Reply #20 on: July 08, 2016, 02:18:12 PM »
Could someone kindly point me to the prospectuses for the series 1 - 3 prefs? Google and the aimia website's search function are letting me down.

Thank you
C


nodnub

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Re: TSX:AIM - Aimia
« Reply #21 on: July 08, 2016, 03:52:24 PM »
Could someone kindly point me to the prospectuses for the series 1 - 3 prefs? Google and the aimia website's search function are letting me down.

Thank you
C

try this: 
https://www.preferredstockchannel.com/symbol/aim.pra.ca/
Link to PDF Prospectus in middle of page.

Don't see the other series on that site.  But they should all be on SEDAR under issuer name of Groupe Aeroplan or AIMIA or something.

« Last Edit: July 08, 2016, 03:54:32 PM by nodnub »

Sunrider

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Re: TSX:AIM - Aimia
« Reply #22 on: July 09, 2016, 01:35:41 AM »
Thank you - I had found that but the site now wants me to register. I've not been able to find the other ones.

SEDAR is just a disgrace.

C.
Could someone kindly point me to the prospectuses for the series 1 - 3 prefs? Google and the aimia website's search function are letting me down.

Thank you
C

try this: 
https://www.preferredstockchannel.com/symbol/aim.pra.ca/
Link to PDF Prospectus in middle of page.

Don't see the other series on that site.  But they should all be on SEDAR under issuer name of Groupe Aeroplan or AIMIA or something.

misterkrusty

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Re: TSX:AIM - Aimia
« Reply #23 on: July 12, 2016, 06:30:05 AM »
kab60-  the only pure-play comps I know of are Multiplus and Smiles in Brazil.  But ADS has a loyalty division in which they manage an air miles program called LoyaltyOne.  ADS is a big company so maybe there is some decent disclosure.


petec

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Re: TSX:AIM - Aimia
« Reply #24 on: July 12, 2016, 08:35:30 AM »
I used to know this quite well and I also know Multiplus and Smiles.   I tend to think it is a fairly good business especially when card penetration is growing.   However it is very dependent on the details of the contract with the airline, so my two questions would be:

1) why don't customers prefer cashback cards?

2) how do we get confidence that the Air Canada agreement will stay favourable (renegotiated in 2020 I believe).

The sweet spot for these companies is when individual flyers get points for business flights (i.e., that they didn't pay for) that can be redeemed in ways that boost the airline's load factor (i.e. the airline generates loyalty at no additional cost).

fisch777

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Re: TSX:AIM - Aimia
« Reply #25 on: July 12, 2016, 04:24:50 PM »
As is often the case, when they built the elaborate new downtown HQ with renowned art in the lobby, time to sell.

Management is sub-par at best here.  No rhyme or reason when we talked to them.

petec

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Re: TSX:AIM - Aimia
« Reply #26 on: July 13, 2016, 01:02:50 AM »
Management is sub-par at best here.  No rhyme or reason when we talked to them.

Agreed.

Uccmal

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Re: TSX:AIM - Aimia
« Reply #27 on: July 13, 2016, 09:24:40 AM »
As is often the case, when they built the elaborate new downtown HQ with renowned art in the lobby, time to sell.

Management is sub-par at best here.  No rhyme or reason when we talked to them.

I am not sure I agree.  They are operating in a very competitive industry with low barriers to entry.  And yet they have managed to pay 8% of sales out to shareholders as buybacks and a dividend that is increased annually, over the last 5 years.  They have shifted a platform from one wholly dependent on one airline to multiple platforms.  That said, more could be done to diversify away from Air Canada.  Its not a good place to be, if something bad happens with the relationship. 
GARP tending toward value

petec

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Re: TSX:AIM - Aimia
« Reply #28 on: July 14, 2016, 01:13:27 AM »
As is often the case, when they built the elaborate new downtown HQ with renowned art in the lobby, time to sell.

Management is sub-par at best here.  No rhyme or reason when we talked to them.

I am not sure I agree.  They are operating in a very competitive industry with low barriers to entry.  And yet they have managed to pay 8% of sales out to shareholders as buybacks and a dividend that is increased annually, over the last 5 years.  They have shifted a platform from one wholly dependent on one airline to multiple platforms.  That said, more could be done to diversify away from Air Canada.  Its not a good place to be, if something bad happens with the relationship.

Can you elaborate on the competition?   I've never been quite able to make my mind up about this.   Part of me thinks that while there is a lot of competition in airlines and credit cards, once you have your relationships with those two, running a rewards business should be as easy as falling over a log.   Who do you view Aeroplan (mainly) as being in competition with?   

Uccmal

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Re: TSX:AIM - Aimia
« Reply #29 on: July 14, 2016, 06:14:35 AM »
As is often the case, when they built the elaborate new downtown HQ with renowned art in the lobby, time to sell.

Management is sub-par at best here.  No rhyme or reason when we talked to them.

I am not sure I agree.  They are operating in a very competitive industry with low barriers to entry.  And yet they have managed to pay 8% of sales out to shareholders as buybacks and a dividend that is increased annually, over the last 5 years.  They have shifted a platform from one wholly dependent on one airline to multiple platforms.  That said, more could be done to diversify away from Air Canada.  Its not a good place to be, if something bad happens with the relationship.

Can you elaborate on the competition?   I've never been quite able to make my mind up about this.   Part of me thinks that while there is a lot of competition in airlines and credit cards, once you have your relationships with those two, running a rewards business should be as easy as falling over a log.   Who do you view Aeroplan (mainly) as being in competition with?

I think you sort of covered it: Airmiles, Credit card rewards programs.  The reason they are able to generate free cash flow is from the built in spread in the existing relationships.  It is similar to a utility such as enbridge.

The problem with utilities, and the aimia businesses, is that in order to expand they have to do so by acquisition.  Every other similar reward slot in the world is already taken by incumbents.  I wasn't very clear in terms of the low barriers to entry remark.  The barriers to entry WERE low when all these programs were started.  They are now very high and cannot be easily transferred across platforms.

Its a strange spot to be in.  On one hand it is quite profitable.  On the other hand you are beholden to a potentially fickle partner.  To grow at all you have to issue equity or debt in a significant enough amount to buy a large established platform elsewhere. 

I am not sure I would buy the common stock in this company - the upside is limited.  The prefs are nice though.  I own a 5-6% position in the a's .   They may always trade down, but in this yield starved world their reliability may get recognized.  All that being said, if the relationship with AC soured even the prefs would be worthless. 

However, I think that the worry about the contract renewal is all for naught.  In order to start its own rewards program or go with some other established program Air Can. would need  to compensate existing Aeroplan points members.  If AC didn't buyout aeroplan then they would alienate a big portion of their customers who would see it as a ripoff.  I dont know about you but I hate being ripped off, and really only tolerate it from my phone company (which I hold stock in).  So, the contract gets signed before 2020, the status quo persists and Rupert keeps his job managing a stranded asset, and attempting periodic acqusitions when opportunities arise. 

The final irony and a credit to Aimia management is that they hold the most consistently profitable piece of the Air Canada franchise. 

GARP tending toward value