US Airways stock is lower than Delta!

[2BorNot2B]

Well ....... this time, when it hits $3 ..... I'm buying!!!!! :angry:

2B

 

[WCT]

This stock price doesn't alarm anyone? :blink: Trouble is a brewin.

Just a question to throw out there. Southwest always trades around the same amount 15 or so? But they seem to still make profits? Does anyone know why?

 

[FWAAA]

Just a question to throw out there. Southwest always trades around the same amount 15 or so? But they seem to still make profits? Does anyone know why?

Southwest's stock price is much less volatile given that its fuel hedges protect it somewhat from the huge volatility in oil prices.

Another reason is that Southwest's Price to Earnings multiple was very high a few years ago and its relatively stagnant price since then has allowed that multiple to come back to earth as the earnings have slowly grown the past few years. In short, it was kinda overpriced a few years ago, so it hasn't appreciated. But it also hasn't tanked the way US has done three times now in the past six years. The first two times resulted in a total wipeout for shareholders in bankruptcy. Dunno yet how this third time plays out for stockholders.

 

[usair_begins_with_u]

Just a question to throw out there. Southwest always trades around the same amount 15 or so? But they seem to still make profits? Does anyone know why?

WCT,

Wow, do you have a few hours?

Stable entities are much easier to value in a traditional sense. Valuation works forwards from revenue and expense projections over a 5 year period or so. If your base numbers are screwed up (as in the case of LCC where the base numbers were inflated by those with special interests after the merger and there was no reliable history) your foward valuations will likely be jacked.

LUV has has stable operations for many years, and therefore its much more reliable to project their profit/earnings forward using historical data. Thats why their stock is much less volitile.

Value is a long run function of people, assets, philosophy. Stock price is a lagging indicator of value.

 

[FWAAA]

Excellent explanation, usair_begins_with_u.

Too bad LH is rumoured to be interested in buying a part of jetBlue this morning instead of LCC, as JBLU is spiking on the rumour.