Norwegian Air Shuttle ASA (NWARF)

[roger wilco]

Could investing in Norwegian Air Stock now make you rich?

Svenn Olsen July 9, 2020
Could investing in Norwegian Air Stock now make you rich?

Investing in Norwegian Air Shuttle ASA (NWARF) airline stock at this time could be considered a great opportunity. It could also be considered a bad move, depending on which stock-market expert you speak with.

Airline stocks during the COVID-19 pandemic

Adverse world events traditionally send all airline stocks tumbling, just to recover and grow again at a later time, once recovery has taken place. Airline stocks tumbled to all-time lows after 9/11, just to climb to new hights years after.

Then the coronavirus pandemic landed, and airline stocks took a dive again. Norwegian’s stock value is around its lowest value ever at the moment.

How did the COVID-pandemic help Norwegian Air reposition itself for future profit?

Norwegian Air was already in a survival and reorganization mode, especially since 2019, long before COVID-19 arrived,

Amazingly, many airline analysts speculate that the timing of the pandemic is helping the airline’s plan to go from survival, for now, to profit in the future!

But how?

~ The pandemic-fueled parking of airplanes, laying off employees, and unprofitable route reductions (expensive fuel and labor cost) enabled Norwegian Air to quickly bring operating costs down to an absolute minimum. The pandemic happened at a time when cost-cutting solutions were needed the most. The airline was able to cut back on expenses without being overrun by competitors who would have otherwise replaced the Norwegian route-system.
~ The pandemic is allowing the airline to implement a gradual and slow recovery, emerging as a leaner airline, much more likely to achieve profits in the future.
~ The new CEO, Jacob Schram had just taken the helm at Norwegian Air when the pandemic hit. Schram is a very capable problem-solver, not afraid of implementing aggressive business-steps to make his airline gradually thrive towards profit after the COVID-pandemic is over.

The potential of investing in Norwegian Air stock now

Norwegian Air Shuttle ASA is trading on NASDAQ under its symbol $NWARF.

The fact is, even the brightest stockmarket professionals in the world are unsure of the future of Norwegian Air stock. NWARF carries a mix of recommendations from stock-trading professionals, with pretty much a divided opinion on whether to buy, hold, or sell the shares.

+However, the value of NWARF shares has the potential of increasing tremendously.

Very low per-share investment with the potential of huge returns

Provided the airline doesn’t declare bankruptcy or liquidate in the future, I believe investing in Norwegian Air stock is a sound investment.

However, if you purchase NWARF stocks, consider only putting in an investment amount that won’t break your financial wellbeing should the airline fail. In that way, the investment risk could be worth taking.

+Depending on how much you invest the rewards could have the potential for making you rich in as little as 4-5 years!

NWARF investment scenarios

In this scenario, let’s say you decide to invest in 25,000 shares of NWARF at a current buying price of $.285 (28.5 cents) a share. That would buy you $7,125 worth of NWARF shares.

Next, since you are a patient investor you sit back and monitor your shares. You’ll probably not see your investment value increase much soon. Your stocks are most likely to sometimes decrease in value too, as long as the corona pandemic keeps its grip on the airline industry.
The value of NWARF shares at the early onset of the coronavirus pandemic

Four months ago, on February 12, 2020, one NWARF share was worth $4.509. If that was today, your 25,000 share investment would be worth $112,725.

On April 4, 2020, Norwegian Air shareholders backed the airline’s survival plan, initially crafted long before the pandemic hit.

In that plan, badly needed equity was raised by issuing new shares in the airline.

95% of voters supported the conversion of about 12.7 billion Norwegian Kroner (NKR) in debt (about 1.36 billion US dollars) into equity, issued as new shares.

By April 14 the share value had dropped to $.498 a share. This came as a result of a worsening airline coronavirus crisis as well as the issuance of additional shares and turmoil among stockholders to come to an agreement.

Hypothetical NWARF values in the future
One year from now

Once the pandemic is over your stock value should increase. But, Norwegian has chosen a slow and steady process to go from survival to profit. So, let’s realistically assume that the share price is up to $1.25 in a year from now.

If that happens, your 25,000 shares investment will be worth $31,250.
4-5 years from now

Fast forward 4-5 years. Let’s say that Norwegian Air is doing well. Now your share price has increased up to where NWARF was priced on September 7, 2015, at $45.28 per share.

That would mean your $7,125 NWARF-investment is now worth $1,132,000.

Or, to be really optimistic, let’s say the airline is now operating at a great profit. Also, and the share price has jumped to where the U.S. airline Southwest Airlines stock price was on December 25, 2017, at $65.45 a share.

Your $7,125 NWARF investment is now worth $1,636,250!
Is investing in Norwegian Air stock worth the risk?

Only you can decide whether you should invest in Norway’s proud Viking-airline. Some pessimists still fear the airline won’t survive long-term. Optimists, however, feel there is no way the airline will fail.

The airline will be following its new and methodical road towards profit as soon as the pandemic is over.

Plus, the very infrastructure of the country of Norway needs Norwegian Air. This is an opinion strongly on the mind of some people in the Norwegian government as well as the Norwegian people.