US and AA....What happens next?
04-14-2012 | 02:33 AM
#61
Gets Weekends Off
Joined: Dec 2009
Posts: 667
Likes: 0
From: 737n/FO
Something else to keep in mind.
JetBlue Now Takeover Candidate (JBLU, DAL, LCC) : Small Stocks Radar
According to an article in the recent Bloomberg Businessweek, JetBlue (NASDAQ: JBLU) is now a takeover candidate with Delta Airlines (NYSE: DAL) and American Airlines (PINK: AAMRQ) as the most logical suitors. US Airways (NYSE: LCC), now considering American Airlines, is always to looking to merge.
In the Bloomberg Businessweek piece by Robert Farzad and Justin Bachman, "Once High-Flying, JetBlue Returns to Earth," Delta Airlines and American Airlines are considered to be the most logical buyers due to JetBlue's strong presence at JFK. Several airline industry analysts noted in the article that this would be most appealing to Delta Airlines and American Airlines, once it emerges from bankruptcy.
At around $4.60 a share, JetBlue is certainly priced low enough to attractive a buyer looking to buy an airline at a discount. In 2007, JetBlue was trading at over $12 a share. Over the last year, JetBlue has fallen 21.33%. In recent trading, JetBlue has fallen while others such as US Airways have risen. Over the last quarter, US Airways is up more than 30%, by contrast.
As a result, it has very attractive valuations. The price-to-book ratio of JetBlue is just 0.74. The price-to-sales ratio is 0.29. On a quarterly basis, both sales growth and earnings-per-share growth are increasing for JetBlue. The forward price-to-earnings ratio for JetBlue is projected to be 7.32. There is also plenty of cash and short term investments to help defray the costs of an acquisition. JetBlue is profitable, but it pales in this area compared to other airlines.
Never appealing to a buyer, however, is a company with loads and loads of debt. With a debt-to-equity ratio of 1.78, JetBlue certainly qualifies under this standard. However, the stock is priced low, which mutates this rating. In addition, debt can always be bought back at a discount.
Lufthansa owns 19% of JetBlue and is monetizing its stake by issuing bonds backed by the shares. JetBlue is down 16.64% in the last quarter, so it is certainly priced to sell. It is also down for the last week and month of trading, too. Even if JetBlue does not sell, the mean analyst target price for the airline is $7.09 over the next year.
JetBlue Now Takeover Candidate (JBLU, DAL, LCC) : Small Stocks Radar
According to an article in the recent Bloomberg Businessweek, JetBlue (NASDAQ: JBLU) is now a takeover candidate with Delta Airlines (NYSE: DAL) and American Airlines (PINK: AAMRQ) as the most logical suitors. US Airways (NYSE: LCC), now considering American Airlines, is always to looking to merge.
In the Bloomberg Businessweek piece by Robert Farzad and Justin Bachman, "Once High-Flying, JetBlue Returns to Earth," Delta Airlines and American Airlines are considered to be the most logical buyers due to JetBlue's strong presence at JFK. Several airline industry analysts noted in the article that this would be most appealing to Delta Airlines and American Airlines, once it emerges from bankruptcy.
At around $4.60 a share, JetBlue is certainly priced low enough to attractive a buyer looking to buy an airline at a discount. In 2007, JetBlue was trading at over $12 a share. Over the last year, JetBlue has fallen 21.33%. In recent trading, JetBlue has fallen while others such as US Airways have risen. Over the last quarter, US Airways is up more than 30%, by contrast.
As a result, it has very attractive valuations. The price-to-book ratio of JetBlue is just 0.74. The price-to-sales ratio is 0.29. On a quarterly basis, both sales growth and earnings-per-share growth are increasing for JetBlue. The forward price-to-earnings ratio for JetBlue is projected to be 7.32. There is also plenty of cash and short term investments to help defray the costs of an acquisition. JetBlue is profitable, but it pales in this area compared to other airlines.
Never appealing to a buyer, however, is a company with loads and loads of debt. With a debt-to-equity ratio of 1.78, JetBlue certainly qualifies under this standard. However, the stock is priced low, which mutates this rating. In addition, debt can always be bought back at a discount.
Lufthansa owns 19% of JetBlue and is monetizing its stake by issuing bonds backed by the shares. JetBlue is down 16.64% in the last quarter, so it is certainly priced to sell. It is also down for the last week and month of trading, too. Even if JetBlue does not sell, the mean analyst target price for the airline is $7.09 over the next year.
04-14-2012 | 04:39 AM
#62
Gets Weekends Off
Joined: Jul 2007
Posts: 217
Likes: 0
From: 75/76 FO
04-14-2012 | 04:52 AM
#63
Gets Weekends Off
Joined: Apr 2005
Posts: 1,190
Likes: 0
From: 767ER capt
That's a pretty risky strategy, if it were true. Do you really think that they pulled out of the premier aviation market in the U.S., purely in the hopes that they can pull off a merger with another airline (something at which they've been generally unsuccessful)?
04-14-2012 | 05:37 AM
#64
Runs with scissors
Joined: Dec 2009
Posts: 7,847
Likes: 0
From: Going to hell in a bucket, but enjoying the ride .
Hey, in 1987 Delta bought Western, just to get the West Coast, but over the past 25 years has slowly backed out and given all that flying to Alaska, who is growing and hiring, to fly all that stuff Delta gave away.
And guess which airline is the next consolodation target for DAL (after they secure that lucrative Oil Farm, of course!)?
And guess which airline is the next consolodation target for DAL (after they secure that lucrative Oil Farm, of course!)?
04-14-2012 | 05:47 AM
#65
Gets Weekends Off
Joined: Nov 2011
Posts: 5,299
Likes: 0
From: A320 Capt
I think they pulled out because they couldn't/wouldn't compete. For years we have been using some of the best facilities at LGA to run a bunch of DHC8s and RJs.
04-14-2012 | 07:31 AM
#66
Line Holder
Joined: Oct 2010
Posts: 1,075
Likes: 20
From: CA
This is exactly correct...US was mostly a regional operator out of LGA with mainline flights to hubs and some Florida. And virtually nothing out of EWR or JFK meaning the business crowd (the supposed target market of US) tended to patronize the larger legacy carriers that offered a broad base of nonstop destinations.
04-14-2012 | 09:50 AM
#67
Gets Weekends Off
Joined: Jan 2011
Posts: 228
Likes: 0
Something else to keep in mind.
JetBlue Now Takeover Candidate (JBLU, DAL, LCC) : Small Stocks Radar
According to an article in the recent Bloomberg Businessweek, JetBlue (NASDAQ: JBLU) is now a takeover candidate with Delta Airlines (NYSE: DAL) and American Airlines (PINK: AAMRQ) as the most logical suitors. US Airways (NYSE: LCC), now considering American Airlines, is always to looking to merge.
In the Bloomberg Businessweek piece by Robert Farzad and Justin Bachman, "Once High-Flying, JetBlue Returns to Earth," Delta Airlines and American Airlines are considered to be the most logical buyers due to JetBlue's strong presence at JFK. Several airline industry analysts noted in the article that this would be most appealing to Delta Airlines and American Airlines, once it emerges from bankruptcy.
At around $4.60 a share, JetBlue is certainly priced low enough to attractive a buyer looking to buy an airline at a discount. In 2007, JetBlue was trading at over $12 a share. Over the last year, JetBlue has fallen 21.33%. In recent trading, JetBlue has fallen while others such as US Airways have risen. Over the last quarter, US Airways is up more than 30%, by contrast.
As a result, it has very attractive valuations. The price-to-book ratio of JetBlue is just 0.74. The price-to-sales ratio is 0.29. On a quarterly basis, both sales growth and earnings-per-share growth are increasing for JetBlue. The forward price-to-earnings ratio for JetBlue is projected to be 7.32. There is also plenty of cash and short term investments to help defray the costs of an acquisition. JetBlue is profitable, but it pales in this area compared to other airlines.
Never appealing to a buyer, however, is a company with loads and loads of debt. With a debt-to-equity ratio of 1.78, JetBlue certainly qualifies under this standard. However, the stock is priced low, which mutates this rating. In addition, debt can always be bought back at a discount.
Lufthansa owns 19% of JetBlue and is monetizing its stake by issuing bonds backed by the shares. JetBlue is down 16.64% in the last quarter, so it is certainly priced to sell. It is also down for the last week and month of trading, too. Even if JetBlue does not sell, the mean analyst target price for the airline is $7.09 over the next year.
JetBlue Now Takeover Candidate (JBLU, DAL, LCC) : Small Stocks Radar
According to an article in the recent Bloomberg Businessweek, JetBlue (NASDAQ: JBLU) is now a takeover candidate with Delta Airlines (NYSE: DAL) and American Airlines (PINK: AAMRQ) as the most logical suitors. US Airways (NYSE: LCC), now considering American Airlines, is always to looking to merge.
In the Bloomberg Businessweek piece by Robert Farzad and Justin Bachman, "Once High-Flying, JetBlue Returns to Earth," Delta Airlines and American Airlines are considered to be the most logical buyers due to JetBlue's strong presence at JFK. Several airline industry analysts noted in the article that this would be most appealing to Delta Airlines and American Airlines, once it emerges from bankruptcy.
At around $4.60 a share, JetBlue is certainly priced low enough to attractive a buyer looking to buy an airline at a discount. In 2007, JetBlue was trading at over $12 a share. Over the last year, JetBlue has fallen 21.33%. In recent trading, JetBlue has fallen while others such as US Airways have risen. Over the last quarter, US Airways is up more than 30%, by contrast.
As a result, it has very attractive valuations. The price-to-book ratio of JetBlue is just 0.74. The price-to-sales ratio is 0.29. On a quarterly basis, both sales growth and earnings-per-share growth are increasing for JetBlue. The forward price-to-earnings ratio for JetBlue is projected to be 7.32. There is also plenty of cash and short term investments to help defray the costs of an acquisition. JetBlue is profitable, but it pales in this area compared to other airlines.
Never appealing to a buyer, however, is a company with loads and loads of debt. With a debt-to-equity ratio of 1.78, JetBlue certainly qualifies under this standard. However, the stock is priced low, which mutates this rating. In addition, debt can always be bought back at a discount.
Lufthansa owns 19% of JetBlue and is monetizing its stake by issuing bonds backed by the shares. JetBlue is down 16.64% in the last quarter, so it is certainly priced to sell. It is also down for the last week and month of trading, too. Even if JetBlue does not sell, the mean analyst target price for the airline is $7.09 over the next year.
If Delta was successful in purchasing JetBlue the DOT would only let them keep half the slots and JFK would say hello to Southwest. This is why JetBlue wasn't bought back in '08.
04-14-2012 | 12:09 PM
#69
SDQ Base Chief
Joined: Mar 2006
Posts: 6,089
Likes: 48
From: 320 CA
Politicians from NY have weight in the the DOT (part of the reason they're one of the only successful startups).
If Delta was successful in purchasing JetBlue the DOT would only let them keep half the slots and JFK would say hello to Southwest. This is why JetBlue wasn't bought back in '08.
If Delta was successful in purchasing JetBlue the DOT would only let them keep half the slots and JFK would say hello to Southwest. This is why JetBlue wasn't bought back in '08.
But the general public thinks that JB is cheaper than the big bad guys, so thats all that matters. Same goes for SWA
