I would probably buy ual vs either but would not buy any airline shares unless further pullback. Seriuosly looking at ual on a pullback to mid 60's and would likely add some aal around 45-46. Otherwise in hold mode, maybe will get bounce up if oil sells down to 40$..
I had always felt 90-100$ was possible by YE 2015/2016 even before the oil crash but more of a challenge now due to issues that have developed since last summer. Still feel will get there but likely 2H 2016 unless issues resolved sooner vs. later.
"When you sell puts you have to make sure you have enough money to buy at the striking price at later time, if the stock closes under Strike price at expiration date, you're on hook for so much money till the expiration date unless you cover it before that date.'' "Unless you cover before that date"....small detail that is usually omitted when discussing selling puts.I covered my march 45$ puts before 4q report. Also, selling puts does not effect my margin requirements as I have a Portfolio Margin account. That said, I would not recommend selling puts to the average investor and have stated the risks ... I have never made a dime buying calls and have no intention of buying now. The great majority of options bought expire worthless. BTW, I did start buying at 37$ and because I have margin was able to continue to buy down to 28%.Had never sold puts until pps hit 28$ and they should only be sold on selloffs imo.
Actually a very good article...suggest all read.
Margin can be very dangerous but has never been cheaper(1.5%) and can be a great advantage on big selloffs if have dry powder. Bought aal on margin in October at 28-35$ share and sold puts..
I have a lot of largely un hedged shares so I definitely do not want to see 45$ even if it could be a very good buying OP. FYI, I have owned lcc/aal for 4-5 years thru some very rollercoaster periods to say the least.
bears, I agree but as they say, it is what it is and we will have to bide our time. The overall market is my main concern at this time and it is bad timing that aal has already corrected over 5% in past week. I originally thought the 1q would be the sweet spot for pps gains but that is unlikely now.Pilots contract was a big plus, will see what January numbers look like but hard to see them being very good. The market seems to be treating the huge fuel savings similar as a special item, kinda the inverse of a special charge, it's being heavily discounted so far.
Hate to rain on the party but other than low fuel costs the fundamentals are not anything to write home about. Revenue pressure, LA/Intl weakness, integration issues, likely fare pressure, increased labor costs, more domestic comp.....My long term outlook is very good but I feel there are short term pressures that may only be alleviated with a strong 1q beat which is a ways off. If the market is in correction mode which imo it likely is or will be, we could unfortunately be looking at around 45$ share in pretty short order. I be buying shares/selling puts if we indeed near 45$.
Finally have more accurate ttm pe/eps , still not accurate, pe should be more like 9 and eps 5.25? but a lot better than the 100 pe they have had for past year. Obviously were not accurate because there was not a ttm until tuesday's report.
Toddman, I did not buy especially since I got spanked on Baba this week which has been a miserable week. Got burned again listening to talking heads on Baba but should have cashed out in november...I think the market may be in sell mode and with the HA report adding to airline revenue jitters along with oil's rise, we could see further downside next week. Wish I would have bought some puts in addition to selling calls before the report, my calls are about maxed out. I am looking at selling puts and buying shares around 45$, yup , will not act until around 45 and than only if feel market is near a bottom. I have a lot of margin also so do not want to jump in early. What a difference a week/few days can make, augh..
The subpar reports I was referring to were for the market overall not aal specifically. I believe the 1q is projected to be the first quarter (or 1q of year ?) since 2009 without any earnings growth in the s+p 500. Airlines still in much better position than a lot of other sectors.
Agree, maybe the prasm numbers helped motivate the pilots to vote Yes. Very big overhang out of the way but I am not very positive on the overall market due to subpar 4q reports and 1q estimates. Could be another very good buying opportunity coming up. Imo aal will likely trade down with the market even though 2015 earnings outlook is very good.
Overall market is very shaky imo...a lot of earnings misses in 4q and may be little/no s+p earnings growth for 1q which has not occurred since 2009.. Would not surprise me at all if we get a big market down day of 2-3% and 10% correction at any time. Hope I am wrong ...
Market is definitely neurotic and for some pretty good reasons..oil, currencies, geopolitics, some weak reports but imo Fed statement today was a positive.
Assuming the market stabilizes, my best guess is pps will not go much below 50$ which would be a 10% correction from high...think today was more of a market issue than aal/airline issue. Covered today some of the 55$ March calls I sold...
Love the margins but mostly due to fuel savings which imo are being discounted by the market..imo aal is underrvalued but right now the market does not share that view. the market as we all know hates uncertainty and aal has a lot of it this year...