I've read that, ultimately, how this stock does over the next couple years is all up to whether the price of oil goes up or down, since that is a huge cost input for the airline. I've been reading various oil forecasts, and they seem to range all over the place from around $80 to $120. There doesn't seem to be a consensus that I see. Anyone have thoughts about this? I'm not talking about trying to guess the price in any given month, but just a general price trend per year.
Now that the lawsuit is history, and the merger is a done deal, why is this thing still dropping when the value is supposed to be around $13? I would think it should pretty much level off at a price close to (but a little bit below) the eventual redemption price .... but what do I know, I guess.
I added a fair sized batch of these to my Roth IRA back when they were about $14 each, after having read articles by an analyst saying that they would not suspend the dividend since so many banks held them. The same analyst said they were a very safe investment, since they were backed by the government. Instead of getting a nice dividend over the past 5+ years, I watched as 95% of their value evaporated.
Since it was a Roth IRA, I couldn't use the losses to any tax advantage (balancing out gains), and so I held on to them over the years. I was frankly quite shocked to get on here today and find that the preferred stock was going for about 9X what I had expected!
After reading some news reports, it looks like we are perhaps a year away from completely paying off all of the money that we got from the government in the form of a bailout. Is that correct?
Once that is done, will the preferred shares that I bought finally no longer be retroactively called "Junior Preferred", and start getting a dividend again? Or is the government planning to simply keep all of the profits for themselves?
I am considering adding this company to my Roth portfolio - maybe 8% of the total. It looks like an out of favor (perhaps oversold), profitable company that is selling at less than book value, and for significantly less than the stock price has been in past years. My biggest question is why so much debt? If they took the cash on hand and paid off debt with it, it looks like they would still have about $400 million in debt. I'm wondering if this is good debt that will lead to improving profits, or "bad" debt that they will have a hard time paying off.
I'm NOT interested in short term guessing on whether this will go up or down today, next week or next month. I AM considering buying and holding for at least 2-3 years to see what happens longer term. However, the debt is a little off putting for me, and I was hoping that some of you long termers here might be able to shed some light on the debt issue for me. Thanks!
I just read an interesting article referencing INFU in Bloomberg Businessweek. Looking over the specs, it appears that Infusystem has rather low margins for a medical device business. Can anyone tell me why this is?
The article appeared to be saying that a self serving board had been gotten rid of, and that the new board's interests were much more highly in line with stockholders. This sounds good.
However, long term debt appears to be a concern, with about 26 million in debt. Looking at the profits, it appears that if all the profits were applied to the debt, the company could be completely debt free in about 7 years. Is this assessment accurate?