La niña could spell trouble for vail resorts – vail resorts, inc. (nyse_mtn) _ seeking alpha definition of stock market
With El Niño which was supposed to be a monster this time seemingly behind us, the cycle in the Pacific that has been getting drastic in recent years looks to be swinging back into La Niña. Market risk premium australia 2015 Hardcore Skiers and Snowboarders likely know about El Niño. Stock market risk and return El Niño usually means massive snowfalls in California, Nevada, Utah, Wyoming, Idaho and Colorado. Equity risk premium historical data As an obsessed snowboarder myself, I would look at coming El Niño snow seasons with nail-biting anticipation. Historical market risk premium s&p 500 I was in Utah during the 2009-2010 season and remember one 72-hour period in which over 7 feet of snow fell in 3 days. Market risk premium uk I could barely walk after those three days on the slopes; we’d be talking about that storm 6 years later every
year we found ourselves in the mountains.
A yearly ski trip is a rite of passage for many Americans, many book the same week every year. Market risk calculation Ski resorts rely on the clockwork-like nature of people starting to plan their trips for the coming winter earlier in the season. Market risk management in banks It’s not uncommon for rooms, houses and condos to be booked up for the bigger weeks as soon as early fall in some cases. Market risk factors examples Just because someone has reserved a room, however, does not mean they will show up. Risk stock market Rather lax cancellation policies and the costs associated with a trek from the east coast to western mountains mean many will simply book the room and not go if there is no snow. Us market risk premium 2016 Ski resorts already have revenue concentration to deal with as they make the lion’s share of their money in the winter of course. Market price risk Now ski resorts are faced with the prospect of guaranteed snow every year becoming a distant memory. Market risk premium south africa 2016 Ten years ago if you planned a trip to Utah in late January through February for a week, you’d almost always get at least one powder day. Market risk management With El Niño and La Niña rotating between each other more rapidly than ever booking a trip, the same week might result with dealing with grassy slopes or more snow than you would know what to do. Market risk capital rule So what are El Niño and La Niña and why would it even matter for a diversified resort operator like Vail Resorts (NYSE: MTN)?
The El Niño – Southern Oscillation or (ENSO) cycle is caused by variations in winds and sea surface temperatures in the tropical eastern Pacific Ocean. Market risk var During El Niño cycles more warm water than usual pools in the east by North, South and Central America, this is due to a weaker current running east to west that usually pushes more warm water towards the west. Market risk premium us The La Niña cycle is just the opposite, the east to west current runs stronger than normal making the water in the east by the America’s colder and the water in the west by Asia warmer. Risk management system in stock market There’s a host of different methods to determine the severity of the El Niño or La Nina cycle but basically, the warmer the water is in the East Pacific the bigger the El Niño and the colder the water in the East Pacific the bigger the La Niña. Market risk career path It seems recently we’ve always been in either El Niño or La Niña and that’s just what the NOAA data suggests. Market risk career It wasn’t always that way. Equity risk premium australia 2015 The cycles between the two were much farther apart in the past with the Pacific Ocean experiencing “normal” conditions much of the time. Subject to market risk Large El Niños have caused massive flooding in the western US and massive droughts in Asia. Market risk management ppt Likewise, La Niña’s were responsible for large droughts in the western US and flooding in Asia. Market risk analyst salary singapore Much of the recent drought conditions seen in the western US can be attributed to a long La Niña cycle from 2010-13. Global solutions network A picture tells a thousand words and the below images show the general global effects of both cycles.
To summarize, snowfall was awful. Us market risk premium However, Vail Resorts saw only modest declines in revenue. Market liquidity risk management During the 2011-2012 ski season, attendance at resorts was still recovering from massive declines during the credit crisis. Market risk jobs singapore That ski week or weekend people took every year was easy to cut when the economy got hit hard. Market risk in banks I’m not saying that’s all that was happening here, Vail’s results during such a bad snowfall year were commendable. Global solutions group Its diversification and investments in snowmaking certainly paid off during that light snowfall season. Managing the risks of organizational accidents By no means, however, was the business firing on all cylinders that season. Market risk management in banks ppt A lesser operation or single resort company would have seen their business significantly deteriorate. Global solutions For Vail Resorts the poor snowfall year was akin to a speed bump. Definition of stock market Further discussing the quarter Katz stated:
“To add some perspective to the resiliency of our business model, snowfall level at our six resorts were down 60% through January as compared with the prior year. Market risk reporting However, mountain reported EBITDA declined only 5.2%. Risk in stock market The strength of our operating model in this unprecedented environment incorporated four key drivers. Var market risk First, the strength of our season pass program continues to pay significant dividend. Market risk in banks ppt Our pass sales which last year accounted for approximately 35% of our total lift ticket revenue for the ski season are up approximately 12% this season, suffering the impact of the decline in visitation on lift revenue.
Second, the continuous investments that we have made to ensure that our assets are the highest quality, clearly rewarded our guests this year, as our resort further differentiated themselves. Hotel risk management jobs Our significant snowmaking capabilities enabled us to have significantly more terrain open than other resorts in the region, driving further guest loyalty as well as attracting new guests to our mountain. Market risk analyst jobs south africa Additionally, our guests were engaged during their vacations due to all of the amenities that exist at our resorts, both on mountain and at our resort based villages.”
Vail has better margins than Intrawest, but on every other metric, we can see just how much of a premium MTN trades vs. Equity risk premium calculator SNOW. Managing market risk This table contains important information but my thesis regarding Vail having a hard time going forward stems more from the weather. Market risk ppt So with this in mind how might this not play out as expected.
La Niña might not show up, at least this year. What is the market risk premium This is a possibility as the weather in general, and for that matter, ENSO cycles can’t be forecasted with 100% certainty. Risk of stock market Alas La Niña does, in fact, look as though it’s coming, NOAA just upgraded their probability to well over 50% by winter 2016 (Source: komonews.com). Weather risk management jobs The reality is that NOAA would never forecast a 100% probability of an El Niño, La Niña or Normal conditions, if they can’t make that forecast certainly I can’t either.
Snowmaking, Vail has invested heavily in snowmaking at all their owned and operated mountains. Market risk policy Snowmaking can be a marketing point and can make skiing and snowboarding more enjoyable or even possible. Market risk management in banks pdf The changing of weather patterns has not been lost on Vail and other ski resorts managements. Market risk analysis pdf If the snow doesn’t show up the easiest way to combat that is of course, just make it yourself. Australia market risk premium 2015 Resorts globally have been investing in snowmaking equipment and new technologies. Market risk pdf Man-made snow is fine for beginners and intermediate skiers and boarders, for the more advanced riders nothing can compare to a powder snow day. Market risk management policy Snowmaking is great and allows mountains to operate when they typically couldn’t do so, but it’s never going to replace mother nature’s real snow completely. What is market risk premium At least not for the millions of advanced powder hounds out there.
Diversification could mean La Niña doesn’t significantly affect Vail’s business yet again. What does a market risk analyst do Terrible snow throughout the western states during La Niñas typically means Whistler Blackcomb, Washington, Oregon and British Columbia are getting pounded with snow. Current market risk premium s&p 500 Whistler has seen some of its biggest snow years during La Niñas. Australian market risk premium As Whistler is now included on the Epic Pass (Vail Resorts season pass) (Source: Whistlerblackcomb.com), an Epic Pass holder could just move his trip from Vail to Whistler. Market risk premium Vail would still see the revenue from that trip. How to reduce market risk The issue with this is BC Canada is quite a bit harder to get to compared to Vail or Park City (the latter being one of the easiest mountains to travel to). What is current market risk premium People still might just cancel their trips if the snow is bad in the west and forgo a trip to Whistler.
La Niña shows up in force, but it snows just the same. Market risk management pdf Big snow during La Niña cycles is always a possibility, there have been big snow years during La Niña cycles in the past, and there probably will also be in the future. Market risk premium 2016 Weather will do what the weather wants to do; it reports to no master or weatherman/woman.
People don’t care. Risk of stock market crash There’s more than just skiing powder snow for the average vacationer. Market risk premium today These resorts have gourmet restaurants, bars, tubing, snowshoeing, concerts, après skiing, etc. Market risk example There is something for everybody. Credit risk market risk An average family of four might take their ski week regardless of snow conditions. What is market risk If the husband or wife was a good skier, they might grumble a bit about not getting a powder day, but it might not be a deal breaker.
As a hardcore skier and snowboarder myself I would love to say I think the 2016/17 season is going to be full of the white stuff. Emerging market risk Unfortunately, it looks like La Niña is at the doorstep yet again and powder days in the western US are going to be few and far between this season. Market risk premium nyu Is MTN a screaming short here? Not yet it isn’t; I’m going to have to see how the season progresses to ascertain how bad it might be. Market risk premium 2012 But with MTN up over 250% in 4.5 years I’m ready to strap on an option trade so I can get something on the tape before the winter plays out. What is the current market risk premium I’d sell the April 2017 160/170 call spread right here taking in $3.75 of premium a contract. Market risk analyst I’m risking losing $6.25 and my original premium if MTN continues to rise over 170. Beta market risk For me to hit my max loss MTN stock will have to rise an additional 8% by April 2017. Risk analysis in stock market If when winter starts and the snow, in fact, doesn’t show up, I’d be looking to outright short MTN stock. Market risk premium calculator For right now, however, this option trade gets me involved but limits my risk if I’m wrong, and like thousands of weather reporters across the country, I very well could be.
I wrote this article myself, and it expresses my own opinions. What is the market risk premium today I am not receiving compensation for it (other than from Seeking Alpha). Market risk premium s&p 500 I have no business relationship with any company whose stock is mentioned in this article.