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Alcoa Inc. Message Board

wgrsh 95 posts  |  Last Activity: 18 hours ago Member since: May 11, 2005
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  • wgrsh wgrsh May 25, 2016 1:14 PM Flag

    Usually, the Fed stays in the background during election time. I think they may skip raising in June due to Brexit, and do an intra-meeting hike in July prior to conventions, and the later election period (If data indicates.). And if things keep improving ... December may be in the picture.

    (Though I feel they have to be careful not to flatten the yield curve too much ... we need to see long rates tweak upward .... hopefully due to real growth and not inflation. I would think the Fed wants to normalize, but not at the expense of cooling off the economy ... it's cool enough. And we already know they pay attention to our rate's relative position to the rest of the world.)

  • Reply to

    P/E Ratio

    by nuthead48 May 25, 2016 11:08 AM
    wgrsh wgrsh May 25, 2016 6:36 PM Flag

    // BTW, I find it interesting how little discussion of cash taxes there is. //

    iah ... I think everyone understands that situation, even before they reversed the NOL's and had to report the non-cash taxes.

    It's a "show me" situation ... I don't know what it will take. If oil averages what it did last year, EPS will be lower than current estimates ($4.xx) ... don't know what share count the market will use in their thinking (GAAP share count or what?). That's still pretty good for a $30 stock. Anyway, for that to happen, oil needs to get up into the high 50s very soon and stay there for the rest of the year. Near the $60/bbl level ... that's pumping territory.

    Just read cav's comment about Kirby and margins ... if those margins are achieved, nothing to worry about.

  • wgrsh wgrsh May 27, 2016 10:45 AM Flag

    Gaps usually get filled, especially low volume gaps, so a "call" ... just playing the odds (but thanks)

    I was listening to Greenspan the other day. He made the comment that the money supply was rising at a higher rate. I wonder if we'll start to hear comments about the Fed reducing their balance sheet by selling some of their long assets to soak up the extra bucks (or not replacing those that mature)? If things are normalizing one would expect the velocity of money to pick up back to the levels of the pre-crisis ... then again I don't know how that would have to be coordinated with the rest of the world. Anyway, if the long end tweaks up, that does leave room for rate hikes without flattening the curve.

  • Reply to

    Effect of Buyback on Earning Per Share

    by not_a_short Jun 30, 2016 3:21 PM
    wgrsh wgrsh Jul 2, 2016 3:46 PM Flag

    // Sure, why not dumping them all since there's no way to lose money on printed money that costed nothing. Less //

    Could be that the Fed doesn't think it is the right time to shrink the money supply by the $4.5 trillion ... could cause deflation, which is what they avoided by doing QE1 and QE2. Meanwhile they are giving the Treasury about $90 billion a year on what they earn from their balance sheet.

  • Reply to

    King Fish Speaks

    by cavalier2015 Jul 8, 2016 4:58 PM
    wgrsh wgrsh Jul 8, 2016 8:22 PM Flag

    Cav ... the airlines are making good money, but the market runs on fear and greed. The Prasm situation, even though it hasn't destroyed earnings, has allowed the creation of the "fear" story about something that is going to happen but hasn't. And fear has a real impact on stock prices.

    What's Parker to do? He understands the fear, but what's to correct at this point if earnings are reasonable. The prasm situation didn't correct this year because fuel unexpectedly fell further at the beginning of the year. Parker hasn't been proven wrong yet.

    Personally, I'd prefer the industry showing they'll adjust first, and stamp out the fear. Have this negative sentiment change, and then do a dividend increase when greed is moving things. Recent airline dividend increases at other airlines didn't help much in this atmosphere of fear.

    I think the industry has taken the initial steps to manage itself ... what it will take and when the market will see that is the question. Let that happen first.

  • Reply to

    King Fish Speaks

    by cavalier2015 Jul 8, 2016 4:58 PM
    wgrsh wgrsh Jul 8, 2016 9:29 PM Flag

    // Fish said today, well know soon if they will do whats needed(scale back growth) //

    I had to marvel that they said that. They know darn well almost all airlines have announced that they are planning to scale back. I don't know what they don't know about it.

    And that puts it back as to when the market will know it. Maybe the fish saying it is the start ... just like the Q4 2014 CC prasm comments that initiated the fears.

  • wgrsh wgrsh May 25, 2016 3:10 PM Flag

    I feel a hike could happen also ... and would prefer it in July for your reasons. Today RF left a low volume gap ... should definitely get back to $9.68 if not lower. RF did bounce off the 200 dma nicely, so with any pullback it could hit that as well. Could get a golden cross soon with the 50 dma crossing the 200. (With all the algo's ... they can make charts look like anything though.)

  • Reply to

    Why are 2017 estimates so low?

    by dmspilot00 Jul 27, 2016 10:33 AM
    wgrsh wgrsh Jul 27, 2016 11:29 AM Flag

    Just adding to unc ... AAL guided to 2014 to 2015 margins going forward. Essentially, $4.2B to 6.2B. This year they should hit near the midpoint, and for 2017 I'm deferring an estimate until I see what the industry does with fares and capacity this fall ... and also what bears said about the fish thinking about fuel going to $60 (that'll make the airlines adjust). Anyway, the industry in general has been making those margins since 2013 (LCC did that in 2013 pre-merger). That's going to be almost 5 years of consistently good margins, during generally weak economic times, and no credit for it. Somebody will notice someday.

  • Reply to

    PRASM guidance a little better

    by iahphx Jul 13, 2016 9:09 AM
    wgrsh wgrsh Jul 13, 2016 9:16 AM Flag

    The midpoint of down 6-7 % prasm beats the Q1 prasm trough by about 2%, which means they have a good chance of going to flat prasm by Q4. And that would be higher yoy revenues (plus credit card revenues).

  • Reply to

    Is this PCLN fallout?

    by iahphx May 4, 2016 2:45 PM
    wgrsh wgrsh May 4, 2016 2:59 PM Flag

    Lot's of things ... The shorts were put on in early April and things are just playing out.

  • Reply to

    Phantom problems

    by iahphx May 30, 2016 10:11 PM
    wgrsh wgrsh May 31, 2016 4:30 PM Flag

    // not all Rigs are the same //

    Yes, and I'm surprised none of the talking shirts talk about that either.

  • The legacies have all indicated they would manage capacity.

    I don't know how many listened to LUV's Q1 webcast, but they indicated only 5-6% increase this year (I think that was mostly out of Houston), and then to average only 2% growth over the 3 years ending in 2018 ... seems to me that means essentially no growth in 2017-2018.

    (This pilot shortage needs some discussion ... seems more and more articles about it are popping up.)

  • Reply to

    2q eps beat ?

    by cavalier2015 May 25, 2016 8:21 PM
    wgrsh wgrsh May 27, 2016 11:09 PM Flag

    // when they guided 14-16% margin when they last year made 17.20%, ... //

    The continuing prasm situation was more of a surprise in the Q1 CC, though the resolution was just pushed out a few quarters. They said awhile ago that 2016 margins would be less than 2015, and then bumping up ... we knew that was coming.

    The markets are in a "wait and see" mood at this point (until they're not). One thing, and as Kirby said, AAL did put the guidance out there and although it was not as bright as others, it was more "on". Let's see if their forecast for improvement will be "on".

    There are things out there that can create doubts ... which can weigh on the stock. That said, it looks like the economy is tweaking up, and that is good. I thought the market responded well to Yellen's comments.

  • Reply to

    ALK should have bought AAL instead of Virgin

    by iahphx May 13, 2016 11:21 PM
    wgrsh wgrsh May 14, 2016 3:36 PM Flag

    // otherwise is just a poormans IBM //

    AAPL's revenues are going down faster than IBM's. The products and services in their industry are changing faster than the in the airlines ... opportunities, but, I'd say, risky too. And then again, top line problems exist throughout most industry these days.

    LUV seems to be going to flat (maybe negative) capacity in 2017-18, and in their last CC they described their recent capacity increases as due to a "unique" situation (Wright, I assume), and they would manage capacity to maintain margins. And there have been feelers being put out for fare increases. I can understand betting that the airline industry won't act rationally, but it would be an early bet, and betting against the industry's rational actions of the last 6 years.

  • Reply to

    Jet fuel prices

    by iahphx May 3, 2016 11:16 PM
    wgrsh wgrsh May 4, 2016 12:10 PM Flag

    Recession calls are always detrimental to cyclical stocks. And rightfully so, but right now the economy isn't flying very high and hasn't been for years. Cyclical stocks would do much worse if the economy fell from a 4-5% GDP than if they had to deal with a drop from a 1-2% GDP economy. How much can things change ... ?

    We have almost been in a recession every year recently (I think Q1 2015 GDP was even negative). Revenues don't grow, but this slowness can allow businesses to adjust to manage profits. Sure there will be bumps, but hitting a pothole slowly is better than hitting it at a high speed. Globally we hit a recession with a 2% global GDP (is that a new definition?) ... I think the chances of muddling along is greater than huge economic disaster.

    But all that said, the "R" word scares investors. And scared investors produce opportunities at some point. Eventually they will realize "the sky is falling" means "it's a cloudy day again".

  • Reply to

    2q eps beat ?

    by cavalier2015 May 25, 2016 8:21 PM
    wgrsh wgrsh May 27, 2016 10:49 PM Flag

    I understand about the fuel costs, though their Q2 costs run from mid-March or so, to mid June ... It'll be higher than their guidance, but will it be $1.53? It was $1.50 in Q4 with what looked like higher spot prices than now. That said estimates need to be tweaked down for reasons you say ... wouldn't mind them in the $1.50 area (or $1.40s?) going into earnings. (A hiccup ... right ... Kirby says they'll adjust to fuel ... right?). Brent settled a penny under WTI ... old times again ... maybe.

    DAL's 21-23% was operating not pre-tax ... wasn't it?

  • Reply to

    United CEO

    by cavalier2015 Jun 4, 2016 8:54 PM
    wgrsh wgrsh Jun 5, 2016 9:45 PM Flag

    cav ... maybe you think an oligopoly is something it isn't. By all definitions it is an oligopoly (domestically), and there are benefits. Does that mean there is always stability? There have been huge cost changes, and it will take a little time for margins to stabilize. It shouldn't have been a surprise to see fuel bottom in Q1 and have prasm follow it down ... that was a surprise dip in fuel and it changed the timing on prasm recovery. In the mean time the airlines all made good money.

    As far as Munoz goes, he could have been referring to capacity in the domestic market, but that is planned to be reigned in ... a positive and rational first step in the right direction. However he very well could have been thinking internationally about capacity. And thinking about possible consolidation taking place internationally. European carriers have been talking about the need to consolidate, and you probably heard about DAL's and UAL's possible moves on Avianca (was that on Munoz's mind?).

    And I probably agree with the few possible domestic mergers that iahphx mentioned.

  • Reply to

    Guidance

    by dca1186 Jun 16, 2016 12:45 PM
    wgrsh wgrsh Jun 16, 2016 11:37 PM Flag

    // Smart how simply Math works? //

    Maybe even more than a dime lower. Though I have to ask how much lower than 590 million shares are you expecting?

  • Reply to

    Income Tax on EPS

    by rockowayman Jun 16, 2016 10:33 PM
    wgrsh wgrsh Jun 20, 2016 12:43 PM Flag

    // //AAL has to account for taxes now, but doesn't actually pay any.//
    Nope, it's just accounting "issue", they don't really pay tax //

    Unc ... you're generally right about many things, but your remarks about posts are a little confusing sometimes. Above iahphx said, "AAL has to account for taxes now, but doesn't actually pay any" and then you said, " Nope, it's just accounting "issue", they don't really pay tax" You said "Nope" to iahphx and then said the same thing he said.

  • Reply to

    AAPL and AAL

    by unclespeaking May 14, 2016 2:10 PM
    wgrsh wgrsh May 14, 2016 6:01 PM Flag

    // oil prediction recently made by Francesco Filia //

    I'm not in the oil predicting business. All I was saying is that if oil moves higher (let's say temporarily) before airlines can show that they can adjust to it, eps estimates for all airlines will come down at least until they show they can adjust to it.

    I know that the spring and early summer is usually the high time for oil, but if it stays at $47, or moves higher, the airlines are going to have to make those things "happen" that they can control (i.e. doing whatever is necessary to raise fares). Right now the analysts are showing a pretty hefty revenue increase for 2017. The airlines need to take some action to show that those revenues are possible. And I'm not disputing that the airlines aren't capable of doing that ... just that it needs to happen if oil stays in this area or tweaks higher, or eps estimates may drop until it does happen.

    Then again, oil may average in the $37-40 range for 2016-17, and what I said won't matter.

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