Virgin Blue Holdings closes at 7.8% above VWP but at 18.1% discount to 52-week high

STOCK REPORT

Virgin Blue Holdings (VBA.AU), Australia's 10th largest transportation company by market capitalisation, closed unchanged at 38.50c, ending a two-day streak of rises. The price is at a premium of 7.8% to the 1-month volume weighted average price of 36.0c. Given that this premium has been under 7.8% sixty-four times and over 7.8% twenty-nine times in the last year, the downside:upside probability is estimated at 64:29 or 2.2:1. Compared with the All Ordinaries index, which fell 7.2 points (or 0.2%) on the day, this was a relative price change of 0.2%.

PRICE VOLUME DYNAMICS

Price Change % 1-day 1-month 1-year VBA Unch 22.22% -17.2% Transportation 0.32% 3.28% 16.99% All Ordinaries -0.17% 2.61% -11.03%

Volatility: the stock traded between an intraday low of 38.0c and a high of 38.50c, suggesting a trading opportunity between peaks and troughs. The average daily volatility of 3.6% places the stock in the 3rd quartile in the market meaning it is mildly volatile.

Volume: there were 2,560,588 shares worth $976,948 traded. The volume was 0.2 times average trading of 10,690,598 shares.

% Discount to high: the last price is at a discount of 18.1% to the 12-month high of 47.0c a year ago on 08 Nov, 2010.

Rises to Falls: In the last three months the number of rises outnumbered falls 29:20 or 1.4:1.

Beta: The Beta of this stock is 0.98. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

Standard Deviation (SD): SD is a statistical measure of deviation from the mean. The SD of 2.9% gives it a percentile rank of 31 meaning that 31% of stocks in the Australian market are less volatile than this stock.

Trailing month: in the last 21 trading sessions there has been a net rise of 22.22%; the stock has advanced 20 times and the biggest one day rise was 6.2% on Oct 14.

SHORT SELLING TREND - close November 03, 2011

Market Short Volume Avg. Daily Volume Australia 291,415 10,786,080

Short Sell % (percent of issued shares): 0.01%

Bullish Indicators: The current short volume is 0.2 times it's own historical average of 0.1%, crashed 87.1% from the previous day, crashed 80.1% from a week ago and crashed 87.3% from a month ago, a significant bullish indicator.

Bearish Indicators: In the Australian Short Selling market of 418 stocks, short selling as a % of issued shares ranked 173rd and within the second quartile of stocks, a bearish indicator.

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PRICE PERFORMANCE RANK IN INDICES AND SECTORS

The stock is in 5 indices and 2 sectors:

The stock was unchanged at 38.50c while transportation sector of 13 stocks and 2 units traded today, was up 3.8 points or 0.3% to 1,197.2

The following index and sector fell:

The Total Australian Market of 1210 stocks and 58 units traded today, which was down 10.9 points or 0.3% to 3,777.9,

All Ordinaries index of 412 stocks and 32 units traded today, which was down 7.2 points or 0.2% to 4,335.3

Percentile Rank 1-day 1-month 6-months VBA 44 88 93 Transportation 67 49 74 All Ordinaries 37 46 60

RELATIVE VALUATION INDICATORS [RVI] FUNDAMENTAL ANALYSIS

Bullish Signals:

- Price/Sales of 0.26 versus sector average of 0.9 and market average of 1.5. We estimate the shares are trading at a current year Price/Sales of 0.2 and a forward year Price/Sales of 0.2.

Bearish Signals:

- Total Liabilities/ EBITDA of 13.5 is more than or equal to 5, this compares unfavourably with the Joseph Piotroski benchmark of 5.

- The average annual compound return on the share price in the last 5 years was -26.5%, underperforming the average annual compound return on the All Ordinaries index of 0.5%

The stock has a score of merely 1 out of 9 set by Joseph Piotroski [pass mark >=5 ]:

Positive operating cashflow.

RELATIVE VALUATION INDICATORS [RVI] TECHNICAL ANALYSIS

Bullish Signals:

- The price gained 4.1% in the last week and soared 22.2% in the last month.

- Compared with the All Ordinaries index which rose 2.6% for the month, this represented a relative price increase of 19.6% for the month.

- In the Australian market of 1,210 stocks and 58 units traded today, the stock has a 6-month relative strength of 93 which means it is beating 93% of the market.

- The price to 50-day EMAP ratio is 1.2, a bullish indicator. The 50-day EMAP has increased to 33.04c. An increase is another bullish indicator.

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) minus the 26-day EMA is positive suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.

- The price to 200-day MAP ratio is 1.22, a bullish indicator. The stock is trading above both its MAPs and the 50-day MAP of 32.19c is higher than the 200-day MAP of 31.54c, another bullish indicator.

Bearish Signals:

- In the last three months the stock has hit a new 52-week low once.

- The Relative Strength Index (RSI) of 83.3 has penetrated the overbought line of 70; the stock is also overbought according to the Williams % R indicator of -12.5.

SHAREHOLDER RETURNS

Trailing one week: the stock was unchanged twice (40% of the time), rose twice (40% of the time) and fell once (20% of the time). The volume was 0.8 times average trading of 53,452,990 shares. The value of $1,000 invested a week ago is $1,069 [vs $996 for the All Ordinaries index], for a capital gain of $69(or rise of 6.9%).

Trailing one month: the stock rose ten times (48% of the time), was unchanged seven times (33% of the time) and fell four times (19% of the time). The volume was 0.8 times average trading of 235,193,156 shares. The value of $1,000 invested a month ago is $1,222 [vs $1,028 for the All Ordinaries index], for a capital gain of $222(or rise of 22.2%).

Trailing one year: the value of $1,000 invested one year ago is $828 [vs $927 for the All Ordinaries index], for a capital loss of $172. The total return to shareholders for 1 year is -17.2%.

Trailing five years: the value of $1,000 invested five years ago is $214, including a capital loss of $793 and dividend reinvested of $7.

$1000 1-week 1-month 1-year VBA $1,069 $1,222 $828 Transportation $1,002 $1,033 $864 All Ordinaries $996 $1,028 $927

FINANCIALS

Annual Report for the year ended June 30, 2011 (year-on-year comparisons with previous corresponding period)-

Favourable Changes: total revenue up 9.7% to $A3.3b ($US3.5b); a track record of profits in 3 of the last 5 years; total revenue to total assets up 10.6% to 0.9.

Unfavourable Changes: total liabilities to EBITDA up 48.3% to 13.5: this compares unfavourably with the Joseph Piotroski benchmark of <5; total liabilities to operating cash flow ratio of 13.6 also compares unfavourably with the Joseph Piotroski benchmark of <4, it had deteriorated by 71.5% from the previous year.; current ratio down 14.5% to 0.6; Net tangible assets per share down 9.3% to $A0.39 (US41.8c); Retained earnings to total assets down 23.0% to 5.7%.

Steady: total liabilities to total assets steady at 0.8.

Major Common Size Ratios: total non-current assets to total assets up from 74.4% to 75.3%; fixed assets to total assets up from 71.1% to 71.7%; total current assets to total assets down from 25.6% to 24.7%; cash to total assets down from 21.0% to 19.0%; current debtors to total assets up from 3.6% to 5.2%; depreciation to sales up from 6.8% to 6.9%; EBITDA to Sales down from 10.8% to 6.6%; interest expenses to sales down from 2.8% to 2.6%; interest revenue to sales up from 0.9% to 1.1%.

MARKET SHARE

Virgin Blue Holdings vs Transportation sector [Transportation sector Total in Brackets]

Revenue of $3.3 billion[15.6% of aggregate sector revenue of $21 billion; down from 15.8% in the previous year.]

FUNDAMENTALS

Valuation VBA Transportation P/S 0.3x 0.9x Size VBA Rank in Transportation MCAP ($) 850.9 million 10 Assets ($) 3.8 billion 6 Revenue ($) 3.3 billion 3

ISSUED CAPITAL

Based on 2,210,197,600 issued equity shares the market capitalisation is $850.9 million. It is Australia's 6th largest Transportation company by assets.

ACTIVITIES

Virgin Blue Holdings Limited is an Australia-based company. The Company is engaged in airline industry. Its segments include short haul and long haul.

TOP MANAGEMENT

The managing director and chief executive officer is John Borghetti and the chief financial officer is Sankar Narayan.

REPORTED BUYING

Reported Buying:

March 23: Virgin Blue Holdings substantial shareholder buys

Virgin Blue Holdings (VBA.AU) substantial shareholder Air New Zealand Associated Companies Ltd bought 17,681,581 shares worth $5,834,922 on March 21, 2011. Air New Zealand Associated Companies Ltd previously held 313,578,276 shares (or 14.2%) and now holds 331,259,857 shares (or 15.0%).

February 23: Virgin Blue Holdings substantial shareholder buys

Virgin Blue Holdings (VBA.AU) substantial shareholder Air New Zealand and associated companies Ltd bought 45,609,505 shares worth approximately $18,015,754 between February 18 and February 21, 2011. Air New Zealand and associated companies Ltd previously held 267,968,771 shares (or 12.1%) and now holds 313,578,276 shares (or 14.2%).

February 03: Virgin Blue Holdings substantial shareholder buys

Virgin Blue Holdings (VBA.AU) substantial shareholder Air New Zealand Associated Companies (Australia) Ltd bought 65,650,728 shares worth approximately $26,260,291 on February 01, 2011. Air New Zealand Associated Companies (Australia) Ltd previously held 202,318,043 shares (or 9.2%) and now holds 267,968,771 shares (or 12.1%).

January 24: Virgin Blue Holdings:Air New Zealand Associated Companies (Australia) Ltd becomes substantial shareholder

Air New Zealand Associated Companies (Australia) Ltd bought 202,318,043 shares worth $103,182,202 of Virgin Blue Holdings (VBA.AU) on January 20, 2011, becoming a substantial shareholder with 202,318,043 shares (or 9.2%). The last price was 50.0c.

BUSINESS NEWS ROUND UP

The last 6 company announcements are:

October 28: Virgin Blue Holdings: Appendix 3B

http://www.asx.com.au/asx/statistics/displayAnnouncement.dodisplay=pdf&idsId=01234952

October 21: Virgin Blue Holdings: CCS Approval of Singapore Airlines Alliance

[News Story] 21 October 2011: Virgin Australia group of airlines (ASX: VBA) today welcomed the Competition Commission of Singapore's (CCS's) approval of its proposed alliance with Singapore Airlines.The proposed alliance will enable the two airlines to provide guests with an expanded network of destinations, seamless connections, a more convenient flight schedule and more opportunities to earn frequent flyer points and access lounges.Virgin Australia group of airlines CEO John Borghetti said: "The Competition Commission of Singapore's decision to grant approval for this strategic alliance is welcome news for our airline."We believe the proposed alliance will enable us to offer a competitive, first-rate product to Australian and Asian travellers, as well as promote tourism in the two regions."Singapore Airlines is widely regarded as one of the best airlines in the world and, following the recent re-positioning of our brand and the introduction of our new business and economy class product, Virgin Australia is a well-suited partner", Mr.Borghetti said.Approval of the alliance is key to the company's strategy of building an international network with global coverage to complement Virgin Australia's core domestic business.The Australian Competition and Consumer Commission (ACCC) announced draft approval of the proposed alliance on 13 October 2011 and the airlines await its final decision. Source: Australian Securities Exchange

October 13: Virgin Blue Holdings: ACCC proposes to authorise alliance between Virgin Australia

[News Story] The ACCC has issued a draft decision proposing to grant authorisation for Virgin Australia and Singapore Airlines to enter into an integrated network aviation alliance.Under the alliance, the airlines will cooperate on all aspects of their Australia - Singapore services and any international and domestic connecting routes, including joint pricing and scheduling and joint marketing and sales."The ACCC considers that this alliance is likely to result in material benefits to the public including enhanced products and services, in particular increased online connectivity for passengers," ACCC chairman Rod Sims said."The ACCC also considers that the alliance is likely to make Virgin Australia more competitive with other airlines, including Qantas."The parties compete on a limited number of routes and upon each of these routes there are a number of competitors offering services that are in a position to constrain the alliance's price and service decisions.

September 08: Virgin Blue: domestic traffic up in July

Virgin Blue Holdings Ltd announced domestic Virgin Australia traffic, measured by revenue passenger kilometres increased by 10.4% while capacity, measured by available seat kilometres increased by 5.4% over the same period. Domestic passenger numbers for the month of July increased by 6% over the previous year. Source: Newsbites

August 26: Virgin Blue reports $67m turnaround loss

Virgin Blue Australia Ltd for the year ended June 30 announced a net loss of $66.6 million vs a profit of $21.7 million for the previous year.It was on revenue up 9.8% to $3.268.3 billion, up 14% on the previous corresponding period.Basic and diluted EPS is negative 3.1c vs EPS of 1c last year.The cash balance is strong at $731 million, with a further $70 million sale and leaseback transactions post the closing date.VBA's 49% owned associate company Polynesian Blue Ltd contributed $200,000 to net profit vs a contribution of $600,000 last year.VBA's CEO John Borghetti said financial year 2011 was a year of enormous challenge and significant change as VBA began to be repositioned to ensure a more stable financial future while there was an unprecedented series of external events The Game Change Program is already delivering results, with an increase in Virgin Australia's corporate and government market revenues of 29% year on year, with further gains expected in the 2012 financial year. Source: Newsbites

July 12: Virgin Blue estimates $45m impact for carbon tax

Virgin Blue Holdings Ltd advised the estimated cost impact, based on Virgin Australia's current domestic fuel consumption, is around $45 million. Virgin Australia will not be able to absorb the additional costs and the costs will be passed on in full to consumers.Initial modelling indicates an average domestic fare increase per flight sector of approximately $3 which will vary depending on sector length. Source: Newsbites

Currency Conversion: Australian Dollar AUD1= US$1.0375 [or US$1= AUD0.96]; Against the US$ the AUD was unchanged for the day; rose 0.4% for the week; strengthened 0.3% for the month; increased 2.0% in the past year. $1 = 100c.

Source: www.BuySellSignals.com