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.