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...
Yup, aal has some weak routes apparently and more competitive pressures than most of the other airlines. As I have said before, there were very good reasons aal went BK and they will not be fixed overnight, will take time and 2015 has major merger hurdles to clear which imo they will but other airlines do not have.
IMO the market is discounting the following over the next year or two: fuel increases, flat to down prasm ,taxes, Venny/Int'l issues/currency, merger/union challenges .Probably forgot something, fact is while fuel savings will likely we huge, most of aal's other metrics are not very positive and the fuel savings may be a one off.. I am still holding but imo we will have to be very patient until we have some non fuel positive news which may not come until the 1q report which hopefully will be a strong beat if analysts do not crank up their estimates..
I am actually down a lot and would like nothing more than pps to recover. Selling calls on some of my shares and buying back some puts mitigated my losses by about 25%.
"If you think the big money didn't have a good idea what was coming this is not the place for you in general. The run up from 50 was the likely result of their thinking. " Actually was what I was thinking also, guess I would be big money...
Apparently I was the only one on this board that hedged because frankly today's action did not surprise me . I sold some calls and covered some puts yesterday and almost sold shares I recently added at 49-50$. I am still bullish on aal but have not covered my calls .