Don't sweat it. We've seen a lot of mental retardation out of Wall Street recently. Airlines went down because of fears of them increasing capacity too much. Then, Boeing goes down? Really? How are they going to increase capacity without buying planes? I mean, it's just ridiculous. Like today, oil went down in price. For months airlines have been trading on oil prices. Yet, today oil goes down and airline stocks go down instead of up? Does that makes sense? Seriously, you can drive yourself crazy worrying about the short-term mood swings of Wall Street. In the long run, though, the price will match earnings performance, and more importantly, cash flow growth and dividend payments, and not be subject to these mood swings. Keep that in mind and think long term and you will wind up doing quite well.
I'm sure they lowered their earnings estimate, too, bringing the PE in line. IMHO, AAL is too low. The other airlines look OK on the list. 2015 earnings estimates were always ridiculous. 2016 may be about right, but probably should be a bit lower.
For me those numbers are really sweet because I bought below those numbers some time ago and some on dips on the ebola scare and recently. I'm thinking the LUV number is about right. (The one you incorrectly call SWA.) The AAL number is too low. I'd put it at $50 for the end of 2015, which would be higher going out 12 months, and $65 for year end 2016. That is good growth anyone should be happy to get. BTW, for those whining that would produce a ridiculously low PE, they will lower the earnings estimates, too. The PE for AAL will be around 10 to 12 with $6.50 earnings in 2016 would be my guess. My advice would be to go ahead and buy AAL and LUV. Those are the two to target for growth. Another good airline investment would be Boeing. Sell airlines and buy oil next winter or so, maybe well into 2016. It's too soon to buy oil now. Stick with airlines in the meantime.
Yes... in 2016 this stock should be selling for $70-90 a share, representing ample growth for investors. LUV looks better at today's price, too. My plan was to hold airlines until oil recovers after Fall. IMHO, oil is overpriced right now. It may hold up over the summer, but oil prices cannot go up after summer and are likely to fall before Fall, if you will. So, that should keep airline stocks flying high. I'm not going to worry about this drop and just pick up a little more airlines.
Yeah, I did pretty good picking up shares on the ebola scare. This would be a good time to accumulate, as well. Even taking the lower 2016 projection, the analyst estimates between now and the end of 2016 is way more than enough to justify a PE higher than today's 9.41. IMHO, the AAL price will bounce back some shortly and continue up for another year or two at a pleasant pace for shareholders. I would not read too much into this temporary selling frenzy. Buy low, sell high, my friend. I enjoyed your post.
No they aren't paying it with debt. They have $2.66 BILLION laying around in cash right now, so you are lying about that, too.
For years moving into this dividend period they were profitable. You are confusing two quarters of quarterly losses, one projected, to "losing money." The will not lose money this year, nor next, according to the very analysts you attempt to quote.
Earlier, I saw you complaining about this 7 cent projected "loss." That is for one quarter and is only $85 million. For a company this size, that is petty cash. They can take quarterly losses like that for eight years and still have cash in the bank and lines of credit stretching to the moon. Also, soon after this tiny 7 cent "loss" those same analysts you are quoting predict a return to quarterly profits. They will be profitable this year.
Yes, this is a downturn because of declining oil prices, but they have weathered far longer and worse downturns than this. They know a lot more about handling the dividend situation and low oil prices than you do, and have the capital and resources to meet the challenge.
All you need to know is to buy at these low prices, collect your dividend, quit posting on bulletin boards, and watch your investment grow going forward.
Only 48% of the Chinese population has internet service and the other 52% want it. That is a potential expansion of Baidu services to 700 million MORE people. In an economy growing 7% per year, and with a potential increase in the user base for search and other Baidu offerings like that, investors have to be crazy to not at least own some of this stock. Dips like this are the time to buy. I've done quite well on this buying on dips and taking profits here and there when it seems "high." This is not "high." I'll continue to do that until Chinese internet penetration reaches the 80% we see in the developed countries.
The EIA predicts global demand will not match global supply until next Fall. We also are near the US capacity 500 million bbl commercial oil reserves. Winter is usually a time of low demand. I do not expect Winter 2015-2016 to be any different. So, IMHO, there is little to no chance we will tap into that reserve to any significant extent, or any amount that would cause the shortages that raise oil prices until Spring 2016.
We really have seen no significant slowdown in global production. That will come, but it does not happen quickly. Current projects and contracts will continue. No new ones will be started for awhile, but it takes quite a few months and sometimes more than a year to slow down production.
In short, what you can look forward to is a mild, unwarranted increase in prices into June based on the notion that demand rises in the Summer months. Again, any demand increase won't matter with so much production and reserves, plus the usually reliable EIA stating global demand will stay behind supply through the Summer. So, my guess is you will see flattening in oil prices. You will see a drop upon the realization it could be late Spring 2016 before demand is close enough to supply, and oil supplies in storage are declining enough, to cause oil prices increases.
That means high flying for airlines. No reason not to take the plunge on AAL at its current price.
That sounds about right. I'm back in at $206. I got a nice run up last time selling near the peak last Fall. Made a very nice profit. Probably should have stayed away longer. But, I can see it selling for $260 within 12 months. So, obviously, I would recommend it as a buy here. I'll have to pay taxes on that last sell, but this time it's in an IRA. Without the taxes, I should net as much as last time. Other recommendation I have in this climate are APH, which gets you a very nice cross-section of all electronics industries, including cell phones, automotive, military avionics and, really, about any electronics that requires connectors. I originally bought it when the market was down back in 2002 thinking it's a way to diversify into tech. It's been an amazing stock for me. I'd also buy some airlines now. I have LUV and AAL. But, sell it in Fall and buy oil stocks. As long as oil is low airlines do well, and I anticipate it will remain relatively low into next Winter then business as usual in 2016 for rising oil prices. Yes, it may go up some over the Summer, but stockpiles are such that it won't be that strong. AAL is probably best. Then sell it and buy COP in the Fall. Unless they mess up, and airlines mess up all the time, the strong dollar should produce good foreign (outside US) travel earnings for AAL over the summer is my thinking. Oil production should match demand by Fall, but with the stockpiles and low winter pricing we probably won't get back to significant rises in oil stock prices until 2016. Not sure exactly how LNG enters into it, but COP could benefit from LNG shipments coming soon.
One of the very most important things a country needs to promote business and have a good, stable citizenry is a fair court system. That is the main thing they are lacking, and it will come home to bight them.