One frequently hears posters state or complain that "AAL is undervalued".
This is a misconception. If one does a free cash flow analysis, AAL is clearly not undervalued. In fact, it is more generously valued than its peers.
A common misconception is that the share buyback has been a "shareholder" friendly policy. Shareholders would have done MUCH MUCH better if the money had been used to reduce debt. The policy of buybacks has instead benefited insiders who have been able to do their planned insider sales programs at higher prices than otherwise might have been possible. This has of course benefited insiders like Parker, et al, but not the common shareholder ( obviously- look at the shareprice). Buybacks should only be considered during times of extreme selling pressure causing temporary shareprice dislocation.
Because AAL has repurchased so many shares at OVERVALUED prices, it has saddled common shareholders with excessive debt, which is not boding well already (again look at the shareprice) and will especially not bode well for AAL common shareholders if we see an economic slowdown or heaven forbid a recession, which is likely sometime in the next year or so.
Bottom line AAL in the near $30 range is not undervalued and not a screaming buy.
agree that we have had a short covering rally which in all likelihood has run its course today. It is a reflection of the reality of poor fundamentals that a rally to $29.50 is actually a selling opportunity.
I think you are a likable person, so please do not take my posts as a personal attack. You have a lot more class than many who post here.
That being the case, I don't think I am quite tempted, just yet, to hire you to invest my money for me..... (smile)