You know what they say about stocks, or sectors, that show relative strength in a down market ... bodes well for the future ... you want to be in them when the market turns.
// Wg, personally I think those that hold, long or short, think about their predictions //
This is a message board, bears ... people can make up anything they want about their holdings ... it's not like they make an sec filing. If you think, what someone says about their "holdings" helps you decide how to invest ... go ahead, listen to them.
I would think that discussing, knowing, etc about the industry, stock fundamentals, the market, technicals, etc is what is important ... but if you want to lend credence to what some anonymous message board poster posts about their holdings and think that makes them more or less credible ... have at it.
Prasm was better for the quarter, but asm's were less than planned, so revenue probably stayed close to what it was before. Knocking off another .5 in margins probably takes away $60 million. It can still hit estimates depending on share count and how close to midpoint their numbers are.
To be safe, I hope quarterly estimates tick down a few. But overall things are still moving along. The dollar is the dollar, and adjustments can be made ... rapid changes within a quarter are hard to deal with immediately.
I see room for negative spin, but really won't be negative. AAL plans increased stage length and fewer departures, saving fuel, but this will also hinder prasm. More asm's will cover that and hopefully cover it plus some.
One positive is that the negative yoy comp of VZ goes away in Q3. And economic conditions should improve going forward ... another positive.
Different segments of Wall Street investors are attracted to different investments ... growth, value, etc.
If oil settles out around $75, some synergies come in and the industry gets a grip on revenues, I'll take the projection of earnings, as well as value.
AAL characterized the current prasm weakness more as 2015 plans encountering some turbulence and airlines will adjust. Currency and world economies created some initial clouds coming into 2015 ... it has for most industries. The industry will tweak its way through things. 2015 initial plans weren't right for conditions.
AAL said Europe was strong ... it was weak going into Q1. AAL said at the end of January 4 countries in South America were weak ... in the CC it was only Brazil and VZ.
Sanctions on Iraq due to Saddam held back Iraqi oil production for years ... he had to change or leave to get their oil going. Would have started to look pretty prosperous by now, if ISIL didn't reappear ... would have started to look like a real beacon of prosperity in the ME ...
There is no separation of church and state in Islam ... very difficult for the western mind to get a grip on. They need a reformation that separates that ... it's too much of a socio/political system that needs to separate from the "religion" (which is looking like a much smaller part of it). Some are talking about the need. Even the leaders in Egypt and Jordan are bringing it up ... that line has to be given support. Otherwise the West can look forward to another 1400 years of periodic confrontation.
This is like watching paint dry ... The CFTC put the position limit and aggregation proposal out for public comment again ... 4th+ time in a year. And this has been going on for over 5 years. Essentially, it will limit positions (aggregated across entities with ownership control) for 28 agricultural, energy and metal commodities. The comment period closes on March 28th. The CFTC needs to do this without watering the proposal down ... they've watered it down some already.
There is huge pushback from some industries and those that like their derivative swaps and don't want transparency, or if transparent, not to be accused of manipulative positions. Shortly after the Commodity Modernization Act of 2000, which deregulated derivatives, and the few years it took to come up with creative derivative products ... you know, commodities and other areas of the financial world have been screwed up. We've all been fed cool aid ... yup, supply and demand. Well, commodities look to futures for determining price ... not necessarily supply and demand. Since the early-mid 2000 commodity derivative swaps with no position limits gave the futures market something to "key off of" for price discovery, and subsequently the futures market provided price discovery for the commodities ... how accurate was our futures market?
Don't get me wrong, speculation is necessary, but just as there can be too little speculation, there can be too much. The CFTC has already come out and said they feel there was 20-25% manipulation (whisper number higher) with oil at $70 and that was a number of years ago when the dollar was weak ... that's in the Federal Register.
The CFTC needs to do what is right. Inaccurate prices in an economy leads to a misallocation of resources ... and an economy that is less than it could be.
This year the Gulf will be producing more, and wells added. The new drilling techniques are being applied in the Gulf. These are wells that will produce for 10+ years.
// Now we have evil incarnate in ISIS to deal with //
We already fought these guy in the surge ... didn't we? They're back.
// Sadamm had been our ally for years and had no WMD. Ditto Assad in Syria.. //
Always wondered about the WMD that the Russians hurriedly took out of Syria. We certainly didn't want to look into it.
// Quadafi was actually moving towards the west, gave up WMD including nuclear program ... //
When we went into Iraq, Quadafi did cry uncle, as you say, but later when it appeared we were backing away from the ME, he started to change his ways.
I really don't know, but I know this time of month the next month's contract starts being quoted. For example, Brent rolled to the April contract from March. The April contract was higher in price. I think WTI is still using March's contract quote, but April's contract is at least a buck higher, so one day (soon) it will jump. Then the prices will normally settle down ... I guess as the contracts get closer to cash ...
Don't know if that is the reason ... just a pattern that seems to happen every month.
The fuel cost savings definitely aren't in the airline stocks yet ... guess there are just too many non-believers. Maybe, with the Chinese airlines reporting last night, that's just the dose of reality that the sector needs.
Filled the gap in the low $50s last week ... it's ready to go.
bears ... ok, thanks ... was just wondering if I missed some news out there today.
Yes, the prasm comps YOY seemed explained to me in the CC, but spooked others I guess.
A small percent due to currency, residual VZ until June, and added seats that couldn't be presold. But having said that, when airlines want to pullback, they pullback, and use anything as an excuse.
// The only airline that has benefited on a fairly significant basis with new slots, etc. is LUV //
bears ... just to mention, even LUV's growth in ASMs this year is mostly from increased stage length and gauge increase with only a minor increase in new departures. And I don't think their ASM growth is out of line especially considering the above.
The industry is still in line, and it's looking like a strong summer.
This happens every year ... certainly not worse than last year. Didn't DAL say the other day that one of the reasons for their prasm weakness was fewer cancellations than last year? I know AAL said during the CC that was a component of their prasm projection, among other things (extra seats, currency, etc)
Just a matter of a few weeks required, bears (I know you know). And historically, drilling fracking wells follows the price of oil. It'll be a lot quicker and cheaper with the latest technological advances.
Right now there are many wells that are drilled, but not being fracked ... so those can be had even quicker. There is also consideration being given to re-fracking old wells (50,000 wells) ... (the old "frack and pray"), but there are companies that feel technological changes make it so there is less praying required.
// "American Airlines Can Survive Rising Fuel Prices" //
The article seemed alright until I read AAL doubled since the early fall ... comparing the ebola low to January high ... guess people have different ways of looking at things ... always have to remember that. And then the article's use of "severe" headwinds supposedly mentioned in the CC ... guess I wasn't listening very well and missed the use of the word "severe".
Re: fuel ... it looks like the marginal producer is Canada with $45/bbl. I don't see how oil is going to get above $55-65 going forward ... it'll just attract production that can be restarted quickly.