AAL Stock Price
10-22-2018, 01:48 PM
#11
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Joined APC: Sep 2013
Posts: 64
Originally Posted by Name User
Earnings have been averaging $5-$6, a multiple of 10 (generous for an airline with little growth IMO) yields $50-$60.
What was your thought process with buying it at $52?
You can make money on airlines, you just have to be a bit lucky and buy at well under current fair value. I made $150k off Spirit (SAVE) this year for example.
I don't see $50/share for some time and only if oil settles down, which with Iran capacity coming down later this year I personally see it only going up. It's possible it will fall into the 20's. Are you prepared for that?
What was your thought process with buying it at $52?
You can make money on airlines, you just have to be a bit lucky and buy at well under current fair value. I made $150k off Spirit (SAVE) this year for example.
I don't see $50/share for some time and only if oil settles down, which with Iran capacity coming down later this year I personally see it only going up. It's possible it will fall into the 20's. Are you prepared for that?
10-22-2018, 03:17 PM
#12
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Joined APC: Mar 2014
Posts: 3,091
Originally Posted by wolfmanpack
To be honest I was completely new at trading and was looking at taking small gains by buying and selling in short time frames. Unfortunately After I clicked "buy" at said price, the next day the stock tanked. I keep thinking I will wait it out so as to not take "as big" of a loss but the highest it has gone since I bought was around $42. Should have taken my licks at that price and done something else with that money. Oh well....like I say....never again!
What you did doesn't sound like trading it sounds like guessing!
Don't take it the wrong way. We call that tuition. Now you know. Learn from it.
IMO the stock price now is unreasonable. The other airlines are priced for perfect scenarios going forward and AA is priced for worst case. Not sure why, probably the debt thing. But, when you look at it on paper, Parker locked in some crazy low interest rates. I dislike the stock buyback program however.
If I were you I would hold. There is more to be gained now than lost. At least I hope! I bought at $32.
We are strong domestically, that is where pricing is strongest. Europe also is performing well. Asia could completely deteriorate. United and Delta are on the hook there, we have less exposure. If oil spikes we are much better positioned than years prior when we had hundreds of S80's. The S80 burns the same as an A321 but carries 45 people less. Huge!
The company really is trying to make this place better. Stay off CnR.
Last edited by Name User; 10-22-2018 at 03:28 PM.
10-22-2018, 04:52 PM
#13
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Joined APC: Aug 2007
Position: On all fours
Posts: 507
Originally Posted by wolfmanpack
To be honest I was completely new at trading and was looking at taking small gains by buying and selling in short time frames. Unfortunately After I clicked "buy" at said price, the next day the stock tanked. I keep thinking I will wait it out so as to not take "as big" of a loss but the highest it has gone since I bought was around $42. Should have taken my licks at that price and done something else with that money. Oh well....like I say....never again!
10-22-2018, 04:53 PM
#14
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Joined APC: Sep 2013
Posts: 64
Originally Posted by Name User
Did you do any research prior? Do you know what a multiple is? EPS? Etc?
What you did doesn't sound like trading it sounds like guessing!
Don't take it the wrong way. We call that tuition. Now you know. Learn from it.
IMO the stock price now is unreasonable. The other airlines are priced for perfect scenarios going forward and AA is priced for worst case. Not sure why, probably the debt thing. But, when you look at it on paper, Parker locked in some crazy low interest rates. I dislike the stock buyback program however.
If I were you I would hold. There is more to be gained now than lost. At least I hope! I bought at $32.
We are strong domestically, that is where pricing is strongest. Europe also is performing well. Asia could completely deteriorate. United and Delta are on the hook there, we have less exposure. If oil spikes we are much better positioned than years prior when we had hundreds of S80's. The S80 burns the same as an A321 but carries 45 people less. Huge!
The company really is trying to make this place better. Stay off CnR.
What you did doesn't sound like trading it sounds like guessing!
Don't take it the wrong way. We call that tuition. Now you know. Learn from it.
IMO the stock price now is unreasonable. The other airlines are priced for perfect scenarios going forward and AA is priced for worst case. Not sure why, probably the debt thing. But, when you look at it on paper, Parker locked in some crazy low interest rates. I dislike the stock buyback program however.
If I were you I would hold. There is more to be gained now than lost. At least I hope! I bought at $32.
We are strong domestically, that is where pricing is strongest. Europe also is performing well. Asia could completely deteriorate. United and Delta are on the hook there, we have less exposure. If oil spikes we are much better positioned than years prior when we had hundreds of S80's. The S80 burns the same as an A321 but carries 45 people less. Huge!
The company really is trying to make this place better. Stay off CnR.
10-22-2018, 05:24 PM
#15
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Joined APC: Mar 2014
Posts: 3,091
Originally Posted by wolfmanpack
Thanks for the advice although I will say that I wouldn't call what I did guessing. At that time I decided to buy AAL my familiarity with the industry and virtually all the research firms etc. indicated AAL was the best position of any of the legacy carriers to show gains. I work at UAL so emotion was definitely not part of my calculus to buy AAL. I am surprised Parker is not feeling some serious heat though with the current stock price and trend vectors. Maybe the earnings report will help turn things around.
My point was you purchased at almost no Margin of Safety (MOS). The stock was fairly valued at the current time. Everything had to go perfect to see any sizable gain. For an airline, that is a huge risk. They aren't a public utility with revenue/costs within 2% YOY. That isn't investing, that is gambling.
Meanwhile analysts were extremely bearish on SAVE yet it has returned 50% as they were screaming sell. (I love Spirit. Would buy again if it falls back into the 30's assuming nothing material has changed. They are the lowest cost operator and YOY have decreased CASM-ex 5% even with the pilot contract. Awesome company to own...at the right price).
An example of setting a simple price target. Best case scenario for Spirit is a PE of 15 (due to growth) and EPS of $4. That gives you $60. That is best case! Don't buy now! You might make some money, but the chances are slim.
Do your own analysis. Ycharts.com is good. It will show you the P/E and avg P/E*. Keep in mind industries have their own "typical" multiple. You can guess on EPS share as revenue is fairly consistent, the BIG driver is fuel. AA lists in their earnings report what they paid over the last few quarters and how many gallons they bought. You can input your own numbers to see how that will effect their bottom line. That being said, I do look at EPS estimates. More as a "fact check".
And don't pay fair value. Never pay fair value for individual stocks IMO. You must have patience.
Another thing. Wall Street loves growth! They assign a much higher multiple to companies that are growing regardless of profitability. And the opposite is true for companies seeing declining revenue. And when those companies that are growing cease to grow, they fall hard.
*P/E aka multiple is the price you pay for one dollar in earnings, typically trailing twelve months or TTM.
Last edited by Name User; 10-22-2018 at 05:37 PM.
10-23-2018, 12:23 AM
#17
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Joined APC: Sep 2013
Posts: 64
Originally Posted by Name User
Analysts? Ha.
My point was you purchased at almost no Margin of Safety (MOS). The stock was fairly valued at the current time. Everything had to go perfect to see any sizable gain. For an airline, that is a huge risk. They aren't a public utility with revenue/costs within 2% YOY. That isn't investing, that is gambling.
Meanwhile analysts were extremely bearish on SAVE yet it has returned 50% as they were screaming sell. (I love Spirit. Would buy again if it falls back into the 30's assuming nothing material has changed. They are the lowest cost operator and YOY have decreased CASM-ex 5% even with the pilot contract. Awesome company to own...at the right price).
An example of setting a simple price target. Best case scenario for Spirit is a PE of 15 (due to growth) and EPS of $4. That gives you $60. That is best case! Don't buy now! You might make some money, but the chances are slim.
Do your own analysis. Ycharts.com is good. It will show you the P/E and avg P/E*. Keep in mind industries have their own "typical" multiple. You can guess on EPS share as revenue is fairly consistent, the BIG driver is fuel. AA lists in their earnings report what they paid over the last few quarters and how many gallons they bought. You can input your own numbers to see how that will effect their bottom line. That being said, I do look at EPS estimates. More as a "fact check".
And don't pay fair value. Never pay fair value for individual stocks IMO. You must have patience.
Another thing. Wall Street loves growth! They assign a much higher multiple to companies that are growing regardless of profitability. And the opposite is true for companies seeing declining revenue. And when those companies that are growing cease to grow, they fall hard.
*P/E aka multiple is the price you pay for one dollar in earnings, typically trailing twelve months or TTM.
My point was you purchased at almost no Margin of Safety (MOS). The stock was fairly valued at the current time. Everything had to go perfect to see any sizable gain. For an airline, that is a huge risk. They aren't a public utility with revenue/costs within 2% YOY. That isn't investing, that is gambling.
Meanwhile analysts were extremely bearish on SAVE yet it has returned 50% as they were screaming sell. (I love Spirit. Would buy again if it falls back into the 30's assuming nothing material has changed. They are the lowest cost operator and YOY have decreased CASM-ex 5% even with the pilot contract. Awesome company to own...at the right price).
An example of setting a simple price target. Best case scenario for Spirit is a PE of 15 (due to growth) and EPS of $4. That gives you $60. That is best case! Don't buy now! You might make some money, but the chances are slim.
Do your own analysis. Ycharts.com is good. It will show you the P/E and avg P/E*. Keep in mind industries have their own "typical" multiple. You can guess on EPS share as revenue is fairly consistent, the BIG driver is fuel. AA lists in their earnings report what they paid over the last few quarters and how many gallons they bought. You can input your own numbers to see how that will effect their bottom line. That being said, I do look at EPS estimates. More as a "fact check".
And don't pay fair value. Never pay fair value for individual stocks IMO. You must have patience.
Another thing. Wall Street loves growth! They assign a much higher multiple to companies that are growing regardless of profitability. And the opposite is true for companies seeing declining revenue. And when those companies that are growing cease to grow, they fall hard.
*P/E aka multiple is the price you pay for one dollar in earnings, typically trailing twelve months or TTM.
10-25-2018, 09:24 PM
#20
Gets Weekends Off
Joined APC: Jan 2007
Posts: 736
Originally Posted by DarinFred
Airline pilots giving and taking financial advice...lol. 😂
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