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View Full Version : AAL Stock Price


wolfmanpack
10-22-2018, 07:14 AM
Made the mistake of buying airline stock a while back when AAL was at $52+ I am curious as to what the seasoned investors on this board think about the future of AAL stock and if there is a serious effort in place to get the stock price back up or if this is some sort of manipulation. Never again! Parker gotta go!


mainlineAF
10-22-2018, 08:30 AM
[email protected] buying airline stock and then asking for investment advice on a pilot forum.

R57 relay
10-22-2018, 08:54 AM
Made the mistake of buying airline stock a while back when AAL was at $52+ I am curious as to what the seasoned investors on this board think about the future of AAL stock and if there is a serious effort in place to get the stock price back up or if this is some sort of manipulation. Never again! Parker gotta go!

I think we announce earnings on Thursday. You should get your answer then. UA and DL put up good numbers, if ours aren't about the same...well, you know.


123494
10-22-2018, 08:54 AM
Sell it. Take the tax hit if it's in a taxable account. Buy an ETF or index covering the total stock market.

full of luv
10-22-2018, 09:29 AM
Sell it. Take the tax hit if it's in a taxable account. Buy an ETF or index covering the total stock market.

Isn't that the truth:
Best Case:
Last time AAL was $52 was March 2018, now $32.40....38% loss
SPY (sp500 ETF) was basically flat since then....

Unknown is AAL earnings, if inline/ahead of industry may get a nice bump. If lagging industry returns, stdby for some more pain.

Remember the timeless quote from JP Morgan back in the very late 1800's: When asked what the stock market was going to do he said the only thing he knew was that "stocks tend to fluctuate"!

Rawhide16
10-22-2018, 09:48 AM
I posted this in another thread but I think it's applicable here as well.

https://seekingalpha.com/article/4206297-american-airlines-beaten-pulp

wolfmanpack
10-22-2018, 10:12 AM
Thanks guys! (Even the sarcastic ones)

full of luv
10-22-2018, 10:27 AM
Made the mistake of buying airline stock a while back when AAL was at $52+ I am curious as to what the seasoned investors on this board think about the future of AAL stock and if there is a serious effort in place to get the stock price back up or if this is some sort of manipulation. Never again! Parker gotta go!

Hey I feel your pain.... I bought into DAL stock when it started climbing in 2013 @ $13. Thought I was brilliant when I sold a year later @$30 something.....by the end of 2014 it was trading in the $50's.

Like earlier poster said:
1. Not wise to trade in airline stocks.
2. Not wise to take investment advice from pilots!

JulesWinfield
10-22-2018, 10:32 AM
The answer is always to buy. Since the price has dropped, continue to buy and dollar cost average. Then keep buying.

Name User
10-22-2018, 11:15 AM
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?

wolfmanpack
10-22-2018, 01:48 PM
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?

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!

Name User
10-22-2018, 03:17 PM
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!
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.

Pilot X
10-22-2018, 04:52 PM
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!

If you have a lot of shares sell calls each month and earn some money back.

wolfmanpack
10-22-2018, 04:53 PM
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.

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.

Name User
10-22-2018, 05:24 PM
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.

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.

Name User
10-22-2018, 05:24 PM
If you have a lot of shares sell calls each month and earn some money back.

Not really a good plan unless you are OK with selling the stock at that price point.

wolfmanpack
10-23-2018, 12:23 AM
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.

Thanks again....good stuff!

DarinFred
10-25-2018, 06:55 AM
Airline pilots giving and taking financial advice...lol. 😂

Name User
10-25-2018, 10:19 AM
Airline pilots giving and taking financial advice...lol. 😂

Just because you may not do well doesn't mean others haven't.

The money is out there to be made. For the patient.

LIOG41
10-25-2018, 09:24 PM
Airline pilots giving and taking financial advice...lol. 😂

Exactly. Some peeps above think they have it all figured out! My favorite line was the reference to Asia deteriorating. Say what?!!!

drinksonme
10-25-2018, 11:40 PM
READ READ READ

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.

Are you schizophrenic? Seriously, you are either that or a lying troll.

FOR ALL OF YOU TAKING THIS GUYS ADVISE OR EVEN LISTENING TO HIM, READ THE NOTE BELOW. IT IS IN THE THREAD REGARDING THE “HEALTH” OF THE COMPANY. This is a copy paste of his exact post for 10/15/2018....approx 10 days ago!!!


“1/3 of our income is eaten up by debt payments. The scarier issue is our profits will fall 50% due to fuel price increases, meaning the majority of our profit will go towards debt repayment and we will just be treading water.

Hence, the stock price.

That being said back in 2011-2012 time frame, with oil climbing and 300 old-ass S80's on the line, what would you do if you were management? They were really between a rock and a hard place. Had oil not gone bonkers (again) I would imagine AA managment wouldn't have bought so many new airplanes.

Another issue is we overpaid for them because of the bankruptcy filing.

To pile it on, we bought 2005 models when the MAX and NEO was just around the corner. So, we'll be at a 15%-20% fuel burn disadavange for 25 years.

Not to be a Debbie downer, though.

Overall the board made a hugely bad decision to buy back stock when they could've paid down our debt. We had an opportunity to be ahead financially but choose not to take it. The company financial performance is the main reason I have not and probably will not move to a domicile. I don't trust this place. We save about 70% of our income and I fully expect to be out of a job in the next five years. After almost five years here, I have given serious thought to leaving.

If I were at Delta or SWA I would move. For this place? Not a chance. They have made it clear they have no long term plan and no desire to run it for a future.

And this resonates with front line employees, most of us don't give a crap which is sad. When we see the company being run better wth more long term decisions being made, maybe morale will improve.”

YGTBFSM.....

You are on here spewing stock advise like some guru, claiming you made 150K off of Spirit Stock....yeah f#(&’ing right. You probably could not make a microwave pizza, much less that much on ONE stock. Yet here you are telling people how to invest and saying positive things about AA and to invest wisely IN AA....yet less then 10 days ago you actually wrote you are considering leaving even though you’ve been here 5 years. You don’t expect to have a job in 5 years HERE AT AA. You are nuts bro. You are either a huge liar and web-board troll, or a crazy loon who I hope never share a flightdeck with...ever. I truly hope you are in a basement with no pilots license to your name.

Here’s some advise for those asking....don’t take advise from this person. None.

Unreal lowness.

Name User
10-26-2018, 10:51 AM
Drinks...

The question was hold or sell at $32.

I explained why his $52 entry point was nuts. I then said there is most likely more to be gained by holding now than selling and why, and comparing our network to the other carriers, and how the market values them vs us.

I honestly don't care what you believe, it is neither here nor there.

If the company continues on it's present trend we will eventually be in a world of hurt. Our frontline employees hate our customers, and management is more concerned about diversity and donating to "causes" than running a tight ship.

Look at EPS from when fuel fell ($8/year) to now...around $4.50. Ok, earnings didn't fall 50%, but close to it. I was pretty close.

All of those issues I mentioned are long term, 5-10 years out, or if spending a career here.

I found I just don't have the same mentality as folks here do. I prefer to be efficient and conserve resources, and there is a ton of waste at this company. It's frightening, and completely unlike how Doug ran US which was actually a profit machine.

The only airline I would invest on a longer term with is Spirit but not at this price. I sold just shy of $50, and bought in the mid/upper 30's.

DarinFred
10-26-2018, 11:40 AM
I’ll save my gambling for the craps table in Vegas.

Al Czervik
10-26-2018, 12:13 PM
I’ll save my gambling for the craps table in Vegas.

No kidding. Buy Vanguard funds.

chrisreedrules
10-26-2018, 12:29 PM
No kidding. Buy Vanguard funds.

I prefer real estate to the stock market. I like tangible assets for one. For two, if the market is doing great then usually real estate is doing great. If the market is doing bad and real estate sales have slowed, there is generally higher demand for rental units. Either way I’m not paying the mortgage and I’m building equity.

Denny Crane
10-27-2018, 12:23 PM
If I was an investing kinda guy, I might take a look at AT&T right now.....dyodd

Denny

Al Czervik
10-27-2018, 01:27 PM
If I was an investing kinda guy, I might take a look at AT&T right now.....dyodd

Denny

Maybe. They have a lot of irons in the fire.

TRZ06
10-27-2018, 01:28 PM
No advice on american stock or whether Parker should stay or not.
He did predict earnings of 3-8 billion a year for the foreseeable future last year. Seeing that the 3 billion will not be reached so soon after saying this won't impress the market too much. I just don't see the upside of predicting something with so much certainty only to see it fail. He may have cried wolf one too many times already to gain credibility on the street IMO.

redbaronahp
10-27-2018, 04:48 PM
The state of the airline didn’t inspire confidence. The mechanics had a lot to say against Doug and even a manager said she took the management buy out to move on to bigger and better things. Not much good in that briefing in my opinion.

chrisreedrules
10-30-2018, 09:40 PM
More bad press

https://www.flightglobal.com/news/articles/american-faces-debt-concerns-from-wall-street-453151/

“The Fort Worth, Texas-based carrier had $22.3 billion in long-term debt and capital leases, net current maturities, at the end of September, a quarterly financial filing shows. That was up 1.8% in the third quarter, and up less than 1% year-over-year.

The amount is nearly $10 billion higher than United Airlines, and nearly $15 billion higher than Delta Air Lines, its two principal US competitors.

"American will be left with a material non-operating expense disadvantage if the economic cycle deteriorates significantly," write JP Morgan analysts in a report today, echoing concerns raised by other analysts during American's third quarter earnings call earlier in October.

Doug Parker, chairman and chief executive of the airline, said at the time that their plan to increase earnings and reduce capital expenditures will result in a "natural deleveraging" of American's balance sheet in the coming years.

Parker, as he frequently does, emphasised the low all-in interest rates on the carrier's debt burden, something JP Morgan agrees is attractive.

Bloomberg data shows the weighted average coupon of American's debt is 4.59%, says JP Morgan.

Still, many analysts believe the US economy is at or near the top of the cycle, raising question marks about American's – and the industry's – revenue growth projections.

In just the third quarter, American borrowed $1.8 billion primarily to fund aircraft deliveries, the filing shows. This includes $756 million in secured aircraft or pre-delivery deposit funds, $588 million in proceeds from sale-and-leasebacks, and $500 million added in September to a credit facility backed by its assets at London Heathrow airport.

The airline invested $994 million in capital expenditures during the third quarter, when it took delivery of four Boeing 737 Max 8 and three Boeing 787-9 aircraft.

American expects capital expenditures to total $3.7 billion in 2018, with JP Morgan forecasting capex rising to $4.6 billion in 2019.

The airline anticipates adding its first 17 Airbus A321neos, 20 737-8s, and two 787-9s, as well as six Airbus A319s, to its mainline fleet next year. Derek Kerr, chief financial officer of American, says all but one of these deliveries are funded.

Cash and short-term investments at American increased 4.1% to $4.86 billion during the three months end in September, the filing shows. Cash was down 15.8% year-over-year.

American had $7.36 billion in liquidity, including the full $2.5 billion available under its revolving credit facilities, at the end of September.”



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