A different industry does not matter when hedging cost increases with futures. Also, while size can matter with purchasing, it can offer advantages/disadvantages (adv = smaller/nimbler buyer; disadv = don't have dedicated, internal team).
My point stands: they need to look further than one year out if they want to have an effective strategy.
If gas prices had gone down, SWA would have incurred an expense but not been 'behind the eight ball.' I am not so sure you understand this strategy. Check out CBOT or CME for more info.
Thanks for the info. I would say two things with the caveat that I am 'out of the know' on commodities for 10+ years:
1. Cyclical demand (known) rarely impacts the price. Deviations in demand do (eg. colder than forecasted (not avg) weather spiking demand, spiking prices).
2. Hedging out a single year is not enough. Check out the business case for SWA in the 1990s (fuel hedging allowed them to dominate).
Hope you are well.
re: what is holding us up....It has a strong balance sheet and strong cash flow. Those are two pretty strong pillars.
The better question might be what are they doing to hedge / mitigate the risk of the fluctuation in the price and/or volume of natural gas used.
Lots of good discussion here.
There are only two things that move a stock price: buying pressure and selling pressure.
Crossing the $250MM mkt cap is an excellent observation.
The lofty valuation can be frightening but not as frightening as a money manager looking for value across a market with loftier valuations (ref: algo 41 article).
Other quick observations:
Modest short posn given the run up (based on yahoo finance 10/31)
Reasonable daily volume as a % of float
ie. not too much manipulation here IMO...compare to an AA on volume, short position, recent run up, etc....
my post must have been pulled...put website addresses on it...
check out thecatsitedotc0m...the thread number is 264736...interesting insight there....
also, check the tidy cat website...you can navigate to the light product (only one)...there are some
reviews that actually pan the product as too dusty (on their own site!)....
tx biblio, algo, and sfias for your thoughts....again, of the stocks I own/follow, this yahoo board has the most substantive posts....anyone else out there have $.02? not that I track monthly but we are up ~10% in sep...