That's exactly why all of these discussions of it going down to 10 are asinine. When something gets this undervalued, even the most thick-skulled "chartist" has to start believing that there's actually some validity to this "fundamental value" concept!
I'm not sure I believe that, but I'd think it'd be a "good" thing if he's actually above the trashy tabloid network who employs that "Cramer" dolt.
On routes where JetBlue flies, business travelers will now have the choice of Mint for $1200 vs. the #$%$ legacy airlines' so-called "first class" for $1800-2500. On what planet or parallel universe would they ever choose the later!?
All the airlines are cheap. The "legacy" airlines are certainly even cheaper from a P/E perspective, however, they really suck and I'm confident they'll continue to shoot themselves in the feet. Since all of the airlines are relatively cheap, I'm going with "get a great company at a good price" rather than "get a crummy company at a great price". JBLU and LUV ftw!
"You would only be down 435 dollars over 14 years." Yes, if you bought and sold at _exactly_ the wrong times. You could pretty say the same thing (and come up with even more extreme examples percentage-wise) about the whole stock market.
Uh, there have been 3 3/2 splits during the time-frame you're talking about. That's the whole explanation right there.
"why do they also have positive cash flow, are paying down debt". Because they've benefited from an unusual combination of ridiculously high ticket prices, low fuel prices, and artificially low capacity during the past couple of years. Some of these things are naturally reverting a little bit. "The street" is having a hissy fit right now because they had an irrational idea that the "perfect storm" that was the airline industry of 2014-2015 would last forever. They've forced the "legacy" airlines to make decisions that their customers hate them for and they'll eventually pay for that. JBLU and LUV will emerge as the winners.
The difference between "last time" and now is that now the "legacy" airlines are much more marginalized than they were before and have been forced to make customer-hostile decisions that will continue to make people avoid them whenever possible.
Yes, JetBlue's P/E is higher, because (unlike the crusty, worthless old "legacy" airlines), they're profitable and _growing_ their earnings. JBLU is being punished by the ANALysts on Wall Street (you know, the same guys who used to drink pitchers of beer in their frat house, puke, and then continue drinking... they're privileged, but they're not the sharpest tools in the shed) because they refuse to comply with these arbitrary RASM related "orders".
Here's how it's going to work, kids: JBLU and LUV will continue to offer a better product, gain more customers, and grow revenue. This will allow them to say "eff you" to the ANALysts demands to increase RASM. The crummy old "legacy" airlines will have no choice but to bend over and comply with the ANALysts' demands. Meanwhile, JBLU, LUV, and perhaps some other forward-thinking airlines will steal market share from the dinosaurs and grow their revenue and profit while doing so. It's not hard to see who will win this game in the long run.
I think your take on the situation is correct, but as I said in an earlier comment:
JBLU management has been doing a great job of running an upstart airline during the past 15 years. Meanwhile, ANALysts, "chartists", and other people associated with "the street" have been turning financial services and the stock market into a joke during the past 15 years. Who should we be putting our trust in here?
My guess would be that they're shorting or reducing stake as part of a "protest", to punish JBLU for refusing to follow the "Do anything and everything to get the RASM up" mandate.
JBLU management has been doing a great job of running an upstart airline during the past 15 years. Meanwhile, ANALysts, "chartists", and other people associated with "the street" have been turning financial services and the stock market into a joke during the past 15 years.
Who should we trust more? I know my answer to that question.
And JBLU wants to use the present cheap-oil environment to steal market share from the #$%$, crusty old "legacy" airlines. My bet is that they can and will. I applaud them for telling "the street" to go eff themselves and am happy to take advantage of the current discount on share price that results from their going against the grain.
Thanks. There seem to be a lot of "chartists" here who care more about "the tape" than the truth.
They're clearly going against what the "investment community" wants them to do, which isn't necessarily a bad thing. The "investment community" is chock full of morons who often know very little about the industries that they "invest" in. Take advantage of their stupidity and incompetence and buy stocks like JBLU when they get driven irrationally low. The truth comes out in the long run. Long term, the viability of a management team's strategy isn't decided by the "investment community".
If you have a reasonably long horizon (I don't see why anyone should really ever buy a stock without at least a 1-year horizon), you don't have to fight "the tape" because you can just ignore it.