I decided to check in after a month or so, and I'm amused that this stock seemed to be loved by everybody at $44, but that there is no shortage of haters at $35. :-)
I would have preferred that American initiate a 5% minority ownership stake in Alaskan Airlines, instead of a dividend.
They haven't paid a dividend in 34 YEARS. So that's the problem - investors now think of this as a matured cash cow, dividend paying stock, and no longer a growth stock - something that is no longer exciting?
I've owned since November of last year, when I bought AAMRQ.
With the ~10% drop over the past 4 days, I guess the average investor now thinks that American Airlines fair price for the stock is down closer to $39 instead of the $47-$48 a lot of folks were talking about. I'm a bit surprised by this, especially with the announcement of a dividend, which I thought just about everyone was hoping for. I thought that a dividend announcement would lead to a bunch of institutional buying, and buying from the folks like an older friend of mine who won't consider ANY stock unless it is paying a dividend. I also liked that they were paying down the debt faster - any mention of that makes me happy.
Evidently there is a LOT more short term viewpoint controlling this stock than long term, or at least that would have to be my conclusion after watching this happen.
Do you see continued weakness in this stock continuing for some time, or do you think it will rebound?
down 2% now pre-market. Evidently there must have been a lot of folks who simply wanted more than just a beat of consensus earnings. However, coupled with a billion dollar share buyback and announcement of a dividend, I really don't see this as a negative. I guess those who are patient will be rewarded, but those who were looking at just today for a big move up may not be happy after all.
As part of the program, American's Board of Directors declared a dividend of $0.10 per share for shareholders of record as of August 4, 2014. The cash dividend is the first declared by American since 1980.
This should lead to a lot of groups that will only invest in dividend paying stocks buying over the next few weeks, correct?
As much as we would all love the institutional buying that a dividend would bring, I would much prefer the fiscal responsibility of paying down the debt in the short term, perhaps coupled with a one time share buyback.
Of course, I'd also like to see American initiate a minority stake in Alaskan Airlines, too - one that they could slowly increase over a number of years.
*** JAWS THEME PLAYING ***
Really, I guess quiet is better than people at both extremes yelling about either:
A) how shorts have to cover, and it's going to $55 tomorrow
B) how longs will lose loads, and it's going to $28 tomorrow
According to the Zacks article on Yahoo, it seems like they are predicting AAL will beat expected earnings by between 2% and 2.5%, if I'm reading this correctly. Thoughts?
I'm curious - does the Yahoo daily stock volume include pre market and after market activity for the day, or just regular day?
Although I had seen that Yahoo showed an average daily volume of 12 million shares over the past 3 months, I never really paid much attention to it.
Yahoo shows 5.xx million shares having traded yesterday, so that is less than half the average volume of the past 3 months. I guess this means that people are holding off for the earnings announcement?
What do you think - will the stock be flat, up or down if AAL simply meets expectations with earnings this week?
Less than two months ago I put about 1/5 of my Roth IRA into KOG January 2016 calls, thinking I would hold onto them for a while. However, then I saw AAL stock price plummet, so I sold KOG and a few others to get back in AAL long calls.
I guess I can't complain, since I'm up about 40% in a couple of weeks. However, I'm rather annoyed to look back on here and find out that I just missed the buyout! At first I thought it was a joke with no premium, but now I see that it is probably worth more like $17.xx a share - decent.
Also, I bought low and sold high twice using KOG in the past - made about 20% once, and 30% the other time. Even though I missed out on the buyout, I'm still happy with it.
I have a bunch of calls, but I certainly don't think they are "safer" than owning the underlying stock. Also, I purchased August 2014 calls, but would recommend January 2016 ones if you are truly looking for increased safety in your investment. A longer time until expiration means a greater chance to participate in a long term rally, and a diminished chance of getting stuck with losses.
Maybe HBO USED to be worth that much, but I'm guessing that the value has eroded quite a bit with the rise of Netflix, Amazon Instant video, Hulu Plus, etc. People are used to watching things when they want to watch them now, on demand. Plus, they are now used to getting all of it for 8 bucks a month.
I've been reading a bit about Fox's continued pursuit of Warner. I'm sure it's not the ONLY thing they are after, but I'm thinking that Fox might be wanting ownership of the DC Comics roster of super heroes. Disney was pretty smart in buying Marvel so they could make oodles of dough from the licensing and movies. (Avengers, etc.) By buying Time Warner, Fox could own all of these characters, have their own super hero franchise without having to regularly pay licensing fees.
Of course, Fox has some future rights for the Marvel X-Men and Fantastic Four movies. My understanding is that as long as Fox keeps churning out profitable X-Men and FF movies every so often, they can do so forever. (or until Disney offers them enough $$ to buy out their interest) It would be interesting for Fox to own the rights to make DC Comics movies, as well as Fantastic Four and X-Men. Would that open up the possibility of Fox making a Superman/Fantastic Four crossover, or an X-Men/Batman movie?
I'm wondering if Fox is interested in controlling the future licensing of Warner/DC comics characters? Disney did quite well in acquiring Marvel, and making the Avengers. I'm wondering if Fox is wanting the DC comics characters so they can have their own super hero movies without having to pay licensing fees & such. What do you think?
I'm just happy I bought some deep in the money long term call options back when the price was $25.50 a share. They're up about 28% right now. I'm planning to hold them until they are up 60%, then I might consider selling.