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Thread: AA 1st Qtr Earnings

  1. #41
    Registered User Dacuj's Avatar
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    Obviously he doesn't understand basic finance. Borrow 750 mil at 5% and make a higher rate on 4 BILLION in cash. That's about as simple as I can make it. On, and your dream company Delta did the EXACT SAME THING a while back.

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    It's a nice game plane for aag to buy back the stock and for pay for parker low buy high sell. The rest of us will just have to starve.

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    Quote Originally Posted by ardvark View Post
    It's a nice game plane for aag to buy back the stock and for pay for parker low buy high sell. The rest of us will just have to starve.
    Oh give me a break. You don't know Jack squat about finance. Oh wait a minute. You still have a piggy bank? Maybe you understand how to put coins in it.

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    Quote Originally Posted by ardvark View Post
    It's a nice game plane for aag to buy back the stock and for pay for parker low buy high sell. The rest of us will just have to starve.
    It was originally $350 million, but they upped it at the last minute. They don’t want to flush cash right now to make the required contributions to their pensions, so they borrowed at 5% interest to kick this debt down the road to 2022. 2022 is after 2021, so that’s likely not a meaningless selection of term date.

    Gee, the most robust economy in decades and AA is still falling WELL short of advertised profits. Since they ARE well short, too risky to drain liquidity. Again, they’re betting on either being able to pay off the additional debt in a few years or going to option 2 at the more opportune time.

    If they were as solid as they claim, they’d use cash. For Delta, it made sense as they didn’t HAVE to do it. AA HAS to do it or risk perilously low liquidity in what could be the perfect storm of timing. Using a loan to pay for the pension means a prettier balance sheet for Q2 as well masking what really is extreme risk. IMO, AA has virtually ZERO tolerance for an economic downturn now. This camel is now literally standing on just a few straws.
    Last edited by Beagleboy; 05-20-2019 at 04:06 PM.

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    Billions now to be spent on new DFW terminal. How much AA coughs up IDK. Of course, this is another solid indicator no money for labor at AA anytime soon and it seems in that department, the beatings will continue until morale improves.

    Who’d have thunk 7 years ago the “New” AA would just be the old AA but with new wrapping and for pilots worse QWL ?

  6. #46
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    Everyone at us air

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    Quote Originally Posted by ardvark View Post
    Everyone at us air
    For the most part, true. They warned APA and AA pilots, but the warnings went unheeded.

    Plenty of money for infrastructure upgrade. Plenty of money for upper Executive compensation. Plenty of money for mid-management bonuses (even if certain financial metrics must be adjusted), Plenty of money for stock buybacks, but flat busted in Baton Rouge for competitive labor contracts. It's an interesting idea of what a "team" is, that's for sure.

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    AA stock - $29.49 (actually almost about to bust its 52 week low of $28.81)

    UA stock - $80.53 (52 week low is $67.93)

    DL stock - $53.76 (52 week low is $45.08)


    What’s wrong with this picture ?

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    What’s wrong?!
    The fact that AA is still above $25.

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    Quote Originally Posted by Sirsnacksalot View Post
    What’s wrong?!
    The fact that AA is still above $25.
    Below $28 now. Looks like the $27 valuation is coming true. How low can it go ? Did Parker buy back ANY stock at this value ? Tsk, tsk, tsk......all that wasted money. One could argue just about every proclamation and strategic move Parker has made has flopped.

    Is AAG’s Captain a wise and astute commander or someone in over his head, lost and hoping a landing strip comes into view soon ?

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    If you were to look in the right places, you’d see that Dougweiser sold all that he was allowed to at “the right time”.
    I’m not much of a conspiracy theorist, but if one were to read the book Grounded, you’d be shocked at how things are mirroring what happened back in the day.

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    Quote Originally Posted by Sirsnacksalot View Post
    If you were to look in the right places, you’d see that Dougweiser sold all that he was allowed to at “the right time”.
    I’m not much of a conspiracy theorist, but if one were to read the book Grounded, you’d be shocked at how things are mirroring what happened back in the day.
    Agreed. Sadly, few are watching or reading though. At Envoy, the glow of the flow in the distance is both distracting and intoxicating.

  13. #53
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    Yes the glow of flow is blinding, maybe thats why all the overspeeds

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    Quote Originally Posted by Beagleboy View Post
    AA stock - $29.49 (actually almost about to bust its 52 week low of $28.81)

    UA stock - $80.53 (52 week low is $67.93)

    DL stock - $53.76 (52 week low is $45.08)


    What’s wrong with this picture ?
    What’s wrong with this picture? Your knowledge about the market.

    Stock prices standing along are meaningless.

    P/E ratio is much more meaningful.

    Again you give half the info.

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    Quote Originally Posted by Sirsnacksalot View Post
    If you were to look in the right places, you’d see that Dougweiser sold all that he was allowed to at “the right time”.
    I’m not much of a conspiracy theorist, but if one were to read the book Grounded, you’d be shocked at how things are mirroring what happened back in the day.
    He only gets paid in stock. So you think he should never sell?

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    Quote Originally Posted by Meatloaf View Post
    What’s wrong with this picture? Your knowledge about the market.

    Stock prices standing along are meaningless.

    P/E ratio is much more meaningful.

    Again you give half the info.
    Stock prices are meaningless ? LOL ! Tell that to investors whose value is based on stock price and not P/E ratio. P/E ratios can be unreliable due to accounting issues and forward looking assumptions by some investors not grounded in reality. Anyone who looks solely at this metric (or represents it to others as THE key metric of stock valuation or a company’s future) is the one who has little knowledge of the market.

    Actually, I’ve stated a stock price in and of itself is in general not a good litmus due to its volatility. Research my posts if you don’t believe me. However, in the case of AA it isn’t its short term fluctuation, but it’s long term slide. Look at AA’s stock performance compared to UAL and Delta. THAT is what is “meaningful”. Look at debt, not just for the number but the risk it entails. AAG wouldn’t have sought another loan to pay for known pension obligations if their liquidity was solvent enough for a “black swan” event. THAT is meaningful. I can only assume you think the fact Parker’s profit projections being less then 1/3 of what they should be now is still a good thing and meaningful, yes ?

    It’s not that you are giving half the info, but assumptive info (and IMO biased based on OBVIOUS negatives surrounding AA) which can be the most misleading type of info. But hey, you obviously think AA is solid and Parker has made all the right moves, so congrats. Personally, I think you’re in for a lot of frustration and disappointment too. Best of luck though.
    Last edited by Beagleboy; 05-30-2019 at 12:00 AM.

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    Quote Originally Posted by Meatloaf View Post
    He only gets paid in stock. So you think he should never sell?
    All the key players are taking regular stock payouts, some of which are actually required. Multimillionaires many times over. Very attractive isn’t it ? I’ll bet that’s your goal too and why not ? Flying airplanes for AA isn’t going to get you to that world, that’s for sure. Unfortunately, garden variety flight dept. middle management and especially the pilot recruiting dept. isn’t likely to get anyone there no matter how many pilots one throws under the bus or how fervently one represents AA’s financial, competitive or ethical prowess.

    If it did, Dacuj would be there already.

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    Quote Originally Posted by Beagleboy View Post
    Stock prices are meaningless ? LOL ! Tell that to investors whose value is based on stock price and not P/E ratio. P/E ratios can be unreliable due to accounting issues and forward looking assumptions by some investors not grounded in reality. Anyone who looks solely at this metric (or represents it to others as THE key metric of stock valuation or a company’s future) is the one who has little knowledge of the market.

    Actually, I’ve stated a stock price in and of itself is in general not a good litmus due to its volatility. Research my posts if you don’t believe me. However, in the case of AA it isn’t its short term fluctuation, but it’s long term slide. Look at AA’s stock performance compared to UAL and Delta. THAT is what is “meaningful”. Look at debt, not just for the number but the risk it entails. AAG wouldn’t have sought another loan to pay for known pension obligations if their liquidity was solvent enough for a “black swan” event. THAT is meaningful. I can only assume you think the fact Parker’s profit projections being less then 1/3 of what they should be now is still a good thing and meaningful, yes ?

    It’s not that you are giving half the info, but assumptive info (and IMO biased based on OBVIOUS negatives surrounding AA) which can be the most misleading type of info. But hey, you obviously think AA is solid and Parker has made all the right moves, so congrats. Personally, I think you’re in for a lot of frustration and disappointment too. Best of luck though.
    Professionals use P/E ratio over stock price when comparing one company to another.

    I never said aal stock was the one to buy. Just pointing out comparing stock prices does nothing

    Delta also borrows to pay their pension liability.

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    Quote Originally Posted by Meatloaf View Post
    Professionals use P/E ratio over stock price when comparing one company to another.

    I never said aal stock was the one to buy. Just pointing out comparing stock prices does nothing

    Delta also borrows to pay their pension liability.
    Professionals also know P/E ratios can be flawed for a variety of reasons. Good ones seek to determine WHY a particular company’s P/E is what it is, not just that “it is”. Delta didn’t HAVE to borrow, it was (and yes, CAN be) a good move. AA didn’t borrow because it wanted to, more so it HAD to. To weaken CoH and liquidity now, put it close to minimum planned levels of both and AAG cannot tolerate more risk considering debt, CoH and economic questions over the next 2-3 years. A quick google of "flaws in P/E ratios" shows many articles about this. For example, one lists 5 MAJOR flaws. They are :

    1. Too simplistic - Among comments is the question, "Does simply taking the current price of the stock and dividing it by the company's most recent earnings number seem too easy ? That's because it really is.". What is happening at AA today has little bearing on "tomorrow" from a historic standpoint and anyone relying on tomorrow based on today is inevitably in for a flop, at least IMO.
    2. Doesn't account for growth - Accounts for neither growth or lack of growth. Let's face it, AA isn't poised for any type of true growth.
    3. Backward Looking - Another quote is "A backward looking number can be of very little help to an investor during a period where economic conditions have changed significantly in a short period of time". Let's also face it.....if ANY company is ripe to change significantly in a short period of time it's an airline and specifically THIS one.
    4. Quality of earnings not considered - The talk here mentions "inflated earnings" as a significant concern. Didn't AA inflate (alter) recent earnings metrics to meet a benchmark to pay out some bonuses to middle managers ? Need I say more ?
    5. The "P' word doesn't consider debt - Well, Tex...…...do I really need to expand on that ? The author correctly confirms, "excess debt can be a real problem". You bet it can and if ANY company in America right now is the poster child for that, it's AA.

    Again, you seem to be arguing AA is in a perfectly good place financially, if not competitively compared to the rest of the industry. Like I said, that’s fine with me if you believe it as that is certainly your choice. Also again, if your future is dependent on AA, I still suggest you plan for the worst.

    To ignore the situation AA is in with its choices, decisions and timing is extremely risky IMO. Hope it works out for you though.
    Last edited by Beagleboy; 05-30-2019 at 09:47 AM.

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    Quote Originally Posted by Beagleboy View Post
    Professionals also know P/E ratios can be flawed for a variety of reasons. Good ones seek to determine WHY a particular company’s P/E is what it is, not just that “it is”. Delta didn’t HAVE to borrow, it was (and yes, CAN be) a good move. AA didn’t borrow because it wanted to, more so it HAD to. To weaken CoH and liquidity now, put it close to minimum planned levels of both and AAG cannot tolerate more risk considering debt, CoH and economic questions over the next 2-3 years. A quick google of "flaws in P/E ratios" shows many articles about this. For example, one lists 5 MAJOR flaws. They are :

    1. Too simplistic - Among comments is the question, "Does simply taking the current price of the stock and dividing it by the company's most recent earnings number seem too easy ? That's because it really is.". What is happening at AA today has little bearing on "tomorrow" from a historic standpoint and anyone relying on tomorrow based on today is inevitably in for a flop, at least IMO.
    2. Doesn't account for growth - Accounts for neither growth or lack of growth. Let's face it, AA isn't poised for any type of true growth.
    3. Backward Looking - Another quote is "A backward looking number can be of very little help to an investor during a period where economic conditions have changed significantly in a short period of time". Let's also face it.....if ANY company is ripe to change significantly in a short period of time it's an airline and specifically THIS one.
    4. Quality of earnings not considered - The talk here mentions "inflated earnings" as a significant concern. Didn't AA inflate (alter) recent earnings metrics to meet a benchmark to pay out some bonuses to middle managers ? Need I say more ?
    5. The "P' word doesn't consider debt - Well, Tex...…...do I really need to expand on that ? The author correctly confirms, "excess debt can be a real problem". You bet it can and if ANY company in America right now is the poster child for that, it's AA.


    You started by simply throwing out the stock prices of the big three. Those numbers alone are meaningless.

    Let me give you some examples. I own one share Apple at $400. Apple splits and now I own 2 shares at $200. Does that mean apple just went in the ****ter?



    Another example,all other things being equal. Google has 1 share outstanding and it's priced at $400. Amazon has 4 shares outstanding and its priced $200/share. Is Amazon a better deal?

    Now if you looked at the historical price of one company you might gather more info, but that info is about the past. We buy and sell based on the future price. Comparing stock prices alone, is not a practice any professional uses. Yes P/E retio isn't the end all be all but it's a piece of the puzzle

    Quote Originally Posted by Beagleboy View Post
    Again, you seem to be arguing AA is in a perfectly good place financially, if not competitively compared to the rest of the industry. Like I said, that’s fine with me if you believe it as that is certainly your choice. Also again, if your future is dependent on AA, I still suggest you plan for the worst.

    To ignore the situation AA is in with its choices, decisions and timing is extremely risky IMO. Hope it works out for you though.
    Show me where I argued this? I simply stated looking at stock price alone is foolish.

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