Thursday, October 23, 2014

Update: American Airlines Reports Record Q3 '14 Earnings


Summary

  • American Airlines reported Q314 earnings.
  • The stock is a strong buy.
  • The investment thesis anticipated short-term issues in Q3 to subside and provide for big gains in 2015 on the sliding fuel prices.
Before the market open, American Airlines Group (NASDAQ:AAL) reported record Q314 earnings. The numbers even beat analyst estimates, but the numbers were highly disappointing compared to expectations when the quarter started. This scenario further highlights how the airline industry is in a more favorable environment with tailwinds easily offsetting short-term issues.

Read the full article at Seeking Alpha.


Disclosure: Long AAL. Please review the disclaimer page for more details. 




It Appears That Icahn Is Right About Apple In One Regard


Summary

  • Though Icahn has overly aggressive forecasts for Apple, he has one point that appears very accurate.
  • Icahn suggests mutual funds are under invested in Apple, but he has not made the case for funds actually having more cash to invest in the stock.
  • Apple's PE continues to inversely relate to the market cap.
After some very bullish media reports regarding demand for the new iPhone 6/6+, Apple (AAPL) has gone nowhere. Sure the overall volatility in the stock market hasn't helped since the much anticipated release of the new phones back in September, but it appears that Apple faces larger problems to obtaining a higher earnings multiple.

Read the full article at Seeking Alpha.


Disclosure: Long AAPL. Please review the disclaimer page for more details. 




Tuesday, October 21, 2014

Update: Apple Q4 '14 Earnings


Summary

  • Apple reported Q4'14 earnings.
  • The stock remains a solid buy.
  • The strong results and guidance due to the iPhone 6 were predicted to struggle to have a material impact on the stock.
After the close on Monday, Apple (NASDAQ:AAPL) reported Q4'14 earnings for the quarter ended in September of $1.42 that easily beat analyst estimates of $1.31. In addition, the company gave strong revenue guidance of $65.0 billion on average for Q1'15 ending in December that easily surpass the analyst estimates of around $63.5 billion. Despite the good numbers, the stock only had a minor gain in after hours with it trading close to all-time highs at around $100.

Read the full update at Seeking Alpha.


Disclosure: Long AAPL. Please review the disclaimer page for more details. 




Playing The Oil Slump With Zulily


Summary

  • The slump in oil prices favors top notch retailers.
  • Zulily has a unique online model leading to fast growth.
  • The large stock declines in Zulily makes the stock cheap now that the retail sector has tailwinds.
Citigroup estimates that the recent slump in oil prices provides the world with a savings of $1.8 billion a day. Assuming oil prices stay low for several months at least, consumer spending should start swaying towards discretionary spending at retailers. Sure some consumers will use savings to buy the latest tech gadget, but a large portion of society will use it to restore a depleted wardrobe.

Read the full article at Seeking Alpha.


Disclosure: No position mentioned. Please review the disclaimer page for more details. 




Monday, October 20, 2014

Update: IBM Continues Share Buybacks Despite Q3 '14 Earnings Miss


Summary

  • IBM reported Q314 earnings.
  • The stock is even more attractive after the sell off.
  • The weak earnings were not anticipated, but the large FCF and stock buybacks offset that weakness.
Prior to the open, IBM (NYSE:IBM) announced very weak Q314 earnings and the sale of the Microelectronics business to Globalfoundries at a large loss. The stock slumped over 7% to multi-year lows, but the company announced plans to continue the questionable stock buyback plan that should support the stock.

Read the full article at Seeking Alpha.


Disclosure: Long IBM. Please review the disclaimer page for more details. 



Thursday, October 9, 2014

Update: Hawaiian Airlines Reports September Traffic Numbers


Summary

  • Hawaiian Airlines reported September traffic numbers.
  • The stock remains a strong buy.
  • Improved operations were anticipated from moderating capacity growth.
Hawaiian Airlines (NASDAQ:HA) reported more outstanding traffic statistics for September. The solid numbers don't explain why the stock was especially weak during the month and shows the disconnect between the fears in the market and the overall improving fundamentals for the airline sector. After peaking over $16 in early June, the stock now trades near $13.

Read the full update at Seeking Alpha.


Disclosure: Long HA. Please review the disclaimer page for more details. 



Friday, September 26, 2014

American Airlines Group: Fuel and Taxes


Summary

  • American Airlines to benefit from reduced fuel costs and consumption.
  • American Airlines won't face income tax payments until 2016, at the current income level.
  • The stock is extremely cheap with the above tailwinds helping offset any global slowdown concerns.
Typically people focus on two certainties in life: death and taxes. For an airline like American Airlines Group (NASDAQ:AAL), the certainties are fuel and taxes. Fuel accounts for the largest expense line for airlines. The ability to lower fuel consumption or the cost per gallon will have a material impact to the bottom line. For taxes, the airlines are entering a new era of dealing with income taxes after decades of loses that eliminated the need to pay the government.

Read the full article at Seeking Alpha.


Disclosure: Long AAL. Please review the disclaimer page for more details.