American Airlines stock hits yearly low; airline industry performance low

[mbenson898]

American Airlines Group stock is going incredibly cheap as the shares touched a new yearly low of $38.26 on Wednesday. https://news.alphastreet.com/american-airlines-stock-hits-new-yearly-low/

The company remains the world’s biggest airline but investors are turning negative due to its higher debt levels. Is it true?

The International Air Transport Association expects global net profit for the airline industry to be $33.8 billion for 2018, down from the previous forecast of $38.4 billion. The link is showing infographics of both net profit and revenue predictions by IATA. Costs have been cited as the reason behind the decline in net profit forecast.

 

[robbedagain]

AA debt keeps rising bec of the shares buy back .aircraft coming in. Older planes leaving n maintenance for up keep on them

 

[CremaDiLimone]

The company remains the world’s biggest airline but investors are turning negative due to its higher debt levels. Is it true?

the airlines took a hit today because of a tweet from delta's ceo. did market cap get sucked out of aal and that money poured into dal today? no.

the ceo said dl will have $2 billion more this year in costs, due to jet fuel.

none of the airlines will end up in the red, but money that could have gone to the shareholder will be going to chevron, BP, shell...etc.

 

[CremaDiLimone]

not unexpected, buffet's group sold off - around 2.5 million shares; of aal (.40 dividend) and bought more delta ($1.40 dividend).

not much of a choice. aa board of directors need to shift money from buybacks (still have $1.7 billion committed; now-2020) to increasing the dividend.

delta, with a bit under 700 million shares outstanding, will spend nearly $1 billion a year on dividends.
aa, with 460 million shares outstanding, would spend about $644 million a year on dividends if they matched dl's dividend.

if aa increased it's dividend to $1.40 a share, i have no doubt there would be a 20%-25% pop in the share price.

 

[jimntx]

At least that much if not more.

 

[CremaDiLimone]

maybe...over a 2-3 day span, i could see $6-$8 pop. they'll probably raise the dividend in increments..we'll see.

they say you can't fight city hall and in this case, you can't fight wall street. maybe they do know.

the number of supervisors and the nothing they bring to the company is amazing. coasting, earning $75k-$80k...don't want to be bothered with anything. they were hired to 'be bothered'.

unbelievable. i've never seen it worse.

 

[UPNAWAY]

Good buying opportunity right now IMHO. I do agree with Creama I'd much prefer to see constant dividend increases rather than stock but backs.

 

[jimntx]

maybe...over a 2-3 day span, i could see $6-$8 pop. they'll probably raise the dividend in increments..we'll see.

Just FYI...as AAL closed at $37.79 yesterday, a $6 increase would be 15.9% increase in stock price. An $8 increase would be a 21% increase.

 

[CremaDiLimone]

i understand...i said over a 2-3 day period. i wouldn't expect the full pop over 2-3 days. at $40/share, if aa offered the same dividend as delta, aa's yield would entice some big shooter investors...mutual funds & hedge funds.

it's so obvious, it has to be in the works. a dividend increase. i suspect that increase would occur over increments.