Going by current PE is pretty useless. Forward PE is a lot more useful. Even then, forward PE is misleading for AAL because of some one time tax credits that will expire this year. These credits are artificially inflating earnings this year.
This kind of thing happens all the time on Wall Street. They are really manic depressive when it comes to stocks. You just have to tune out the noise. The correct situation is somewhere in between. Look at the way they whacked the whole retail sector on a couple of bad stories. Or more recently the Restaurant stocks. Right now the mood on Wallstreet is getting pretty sour on Airlines. They trot out the usual arguments, excessive capacity, high debt, rising fuel prices. Cramer is just a parrot for Wallstreet group think.
Buy what you know. I love the Texas Roadhouse in my town. It is always packed. I go once a week so decided if it was that good, I needed to buy the stock. Bought in the mid 20's. Wish I had more. I may be tempted to buy some now that the price has dropped but I own quite a bit now. They are very shareholder friendly with a nice growing divvy and they are low on debt. They are very thoughtful on their growth plan so you shouldn't get this boom bust thing like so many franchises. I hate the Buffalo Wild Wings in my town so I would never buy the stock. I like Chili's so maybe I would buy some EAT.
This seems to be related to the BWLD earnings news. I don't see anything else. TXRH is lumped in the same category and the jest of the news is that BWLD came up short due to food and labor cost increases. Investors may be nervous going into Monday's earnings. Sounds like a buying opportunity to me.
I have been to both but really detest chains. I prefer the mom and pop burrito joints. A $2 burrito at Taco bell is no comparison to Chipotle. On the other hand, $5 for a burrito is no comparison to mom and pop joints I go to. Chipotle is a fad plain and simple. Both the stock and the food.
It does look like folks are especially bearish. Yes, investment income is down but that was pretty well known already. So underwriting was just fine. Folks can play the options fine but I am comfortably long as I have been for years. Just keep collecting my dividend checks which get 10% bigger every year. Please sell it down to 70 so I can buy more shares.
Sentiment: Strong Buy
This is one of the biggest yo-yo stocks I own. Most certainly headed higher.
There is some talk that the reserve is too big based on current import requirements and we should draw it down. I think we should build it up to protect our shale industry and jobs.
I agree for the near term the dividend is safe. I think if oil prices remain low for the next couple of years then the current dividend is not safe. The problem is that they will not be making coverage for at least the next couple of quarters. They will be essentially paying out of savings. If you invest for dividends like I do, I would say you are better off waiting. Best case scenario is that the dividend is not cut but I believe it will not be raised for several quarters. I see no reason to rush into CVX when there are many dividend payers that are going to raise their dividend this year. A 4% yield is not enough to compensate me for my risks when I can get SO that pays a higher yield and shows positive earnings growth and will make a dividend increase within the next quarter. You can't say that about CVX.
The total capacity of the reserve it 727 million barrels of crude. Last I checked we were around 695 after the Obama administration sold off 5 million barrels. There was a proposal a few days ago to buy back that 5 million barrels. So right now we could add 32 million barrels to the reserve. Unknown to a lot of folks there is actually a heating oil reserve and a gasoline reserve.
Generally, it is best to wait till the stock washes out after the IPO before getting in. Saw this with FB, saw it with MBLY, and also LOCO, all stocks I bought after they washed out. FB I sold after it doubled but probably got out too soon. The other two I own. Usually happens 2-3 months after the IPO. MBLY took a bit longer but certainly now is the time you should own it for awhile.
The media is hyper bearish on oil, but the public is not bearish enough on oil stocks, people are jumping in way too early. I dumped my oil stocks at the beginning of October last year. Doubt I will be buying any before October this year. I said at the beginning of this year and I will say it again. CVX is a 60-70 stock. Over 100 is a very good sell price for CVX.
I don't see them cutting the dividend although they probably won't make coverage this quarter or next. They will probably tighten spending and dig into their pockets a bit. On the other hand, a dividend raise probably isn't going to happen. It would be irresponsible in the face of falling earning. I just don't see a lot of reason to rush out and buy a company with trading at a 27 PE and a 4 percent yield with very little prospects for a raise over the next couple of years when I could buy SO for a nearly 5 percent divvy and the prospect of raises and a much lower PE.
It really is just a knee jerk reaction to the sharp move up in rates. The theory goes consumers won't be buying consumer durable's as rates rise.