Seeking Alpha

Humble Eagles

Humble Eagles
Send Message
View as an RSS Feed
View Humble Eagles' Comments BY TICKER:
Latest  |  Highest rated
  • Apple beats estimates, guides in-line [View news story]
    Well, I would keep it cordial and humorous. You probably won't see Richbar, Cincinatus, dezee, or barantos for a while. Eating crow is seldom tasty or pleasant. Michael is almost always cordial, though, and the problems usually come from Apple bulls who get mad at his never ending negative opinions. He is probably working the negative angles as we speak!
    Jan 27, 2015. 06:35 PM | 8 Likes Like |Link to Comment
  • Apple beats estimates, guides in-line [View news story]
    I'll try to think up some negative takes on this for Michael:1) iPhones are getting so big that Apple will surely fail going forward. Apple will have to start selling them to aliens to grow any more. Law of big numbers. 2) The CFO can't hit a dartboard from 2 feet away. Incompetent. I mean really. How do you forecast that far below the results and claim you have any idea what you are doing? His midpoint was almost 10 Bn too low! Apple is doomed. 3) iPads dropped by millions and millions. Short this name!!
    Jan 27, 2015. 05:00 PM | 28 Likes Like |Link to Comment
  • Apple Earnings Preview: Up, Up And Away [View article]
    They should have a monster qtr--the mother of all blowouts. Two things worry me: currency headwinds and iPads...GLTA.
    Jan 27, 2015. 04:26 PM | Likes Like |Link to Comment
  • Update: American Airlines Beats On Earnings, Expects To Save $5 Billion From Low Oil Prices In 2015 [View article]
    I agree with you, Hard! AAL is a reverse oil well--almost like shorting oil. The fact that AAL is selling in the 3-5 X earnings range tells you the market still doesn't get it. Mr. Market is offering you a short on $85 oil, but it only costs you $45. If it goes up you shouldn't lose; if it stays down, you make a bundle. AAL does have other risks, so the analogy breaks down at some point. GLTA.
    Jan 27, 2015. 01:23 PM | 2 Likes Like |Link to Comment
  • Update: American Airlines Beats On Earnings, Expects To Save $5 Billion From Low Oil Prices In 2015 [View article]
    up, they discussed this a good bit. Basically, they are getting hundreds of new planes. The newer planes have more seats, but lower costs. So, PRASM drops a little, but costs drop a lot. PRASM down slightly; profits up by more. That is from memory, but I think that is close.
    Jan 27, 2015. 01:18 PM | 1 Like Like |Link to Comment
  • Update: American Airlines Beats On Earnings, Expects To Save $5 Billion From Low Oil Prices In 2015 [View article]
    gold, exactly the opposite was discussed, and I was a little surprised, too. He talked about financing the new planes at very low rates vs. renting them, and which is smarter. They did say that they had been paying down the high cost debt (over 6%), and they have a little more to pay down over the next couple of years. The new aircraft can be financed at ~4%, according to AAL, so I expect debt will stay pretty high. Interest costs will stay low, though, and much lower than renting, or the higher finance costs of the past.
    Jan 27, 2015. 01:15 PM | Likes Like |Link to Comment
  • American Airlines earnings call: $5B in fuel savings on the way [View news story]
    Bob, they said they had paid down all of the higher priced stuff (over 6%) already, with a bit more over the next couple of years; they have more than enough to cover it. The other strong point was that they were completely caught up on pensions. I think they said they were projecting fully funded through '19. I'll have to wait and check the transcript, though. Just a large number of positives. I think the new airplanes are getting the short stick on PR. At 60MM each, 200 planes would be 12Bn. At 4%, you are looking at 480MM in interest to carry 100%. The finance carrying cost can get cheap enough to really help the purchase via fuel savings and reduced maintenance alone. There have been very few times when buying new airplanes was cheaper, and AAL's fleet is projected to be the youngest of any airline. So, they will be efficient and cheaper to operate. They are set for higher or lower oil.
    Jan 27, 2015. 01:01 PM | Likes Like |Link to Comment
  • American Airlines earnings call: $5B in fuel savings on the way [View news story]
    $6.97 + $5.70 from this year (assuming flat performance) is a pretty big number! $12.67 would put a PE of 3.99 in reach this morning. And it would mean AAL sold for 2-3 X this year's earnings back in October! Who said you can't find bargains any more? The NOLs should make this windfall completely available. Not only does AAL look brilliant for not hedging, they also made the decision during the quarter to accelerate ~1Bn in buybacks and grabbed the shares in the low 40's on average. AAL appears to be making great decisions right now. I would add that adding new airplanes (which can take many years from order to delivery), while rates are at historic lows has also worked out in their favor. It lowers the costs of owning them over their life, and Parker said they are getting them for about 4%. So, they ordered the planes while the industry had one foot in the grave, and they are financing them at the lowest point in decades. Over 200 in 14 and 15 alone. They will have the youngest fleet of any carrier this year. All brilliant. Maybe they are lucky, but I will take that, too.
    Jan 27, 2015. 11:37 AM | 3 Likes Like |Link to Comment
  • My Best Idea For 2015 - American Airlines [View article]
    The problem is that big oil is still priced as if oil were $85, and so are airlines. I would wait for a couple of years on that call.
    Jan 27, 2015. 11:16 AM | 1 Like Like |Link to Comment
  • Southwest: When Airlines' Boom Busts You Need Some LUV [View article]
    Dana, in your article your point was that oil prices will go back up, so if they are keeping their costs in line to stay very profitable at $100 oil, why is that stupid? I think it is brilliant. They aren't adding capacity, thus avoiding price wars. They have reduced all of their debt over 6% and are looking to finance new planes around 4%. They are upgrading planes at over 100 new aircraft per year and upgrading facilities. They are paying a dividend for the first time in years, and they took advantage of the ridiculous stock price last quarter, nabbing almost a billion in the low $40s. Again, brilliant work. They also announced $2Bn in additional buybacks. And, if business is flat and oil is flat they should make well over $10/sh. So, who else is selling for 3-5X this year's earnings?
    Jan 27, 2015. 11:09 AM | 2 Likes Like |Link to Comment
  • Southwest: When Airlines' Boom Busts You Need Some LUV [View article]
    Wrong conclusions imho, Dana. AAL announced $5.70/sh net of special charges today for *last* year and that was with oil averaging close to $100. How high does it need to go to crash them? You really think we will see $150 oil soon? AAL is running their airline like oil is $100. After going through what they have in the last fifteen years, they still have a bunker mentality imo, as do most of the legacy carriers. BTW, AAL guided this AM for over 5Bn in gas savings this year if prices for jet fuel stay the same as this week--that is ~$7/sh. So, at almost $13 ($5.70+$7) this year, we could actually make a 3 handle on the PE for this year's earnings this morning! We can normalize for the NOLs, and we can simulate oil going back up, but they are still going to make a ton of money. LUV is also a great company, but it is priced for greatness, or at least goodness. AAL is still priced for imminent bankruptcy. DAL is priced for $100 oil. I think the herd is in denial on oil and airlines. Everybody expects oil to jump back to $80 and maybe it will, but even $80 is bullish for the really cheap legacy carriers.
    Jan 27, 2015. 10:52 AM | Likes Like |Link to Comment
  • Fuel costs down 17% for American Airlines in Q4 [View news story]
    From the Conference Call: because they aren't hedging fuel costs, and at Jan 22 prices, savings will provide over 5Bn (about $7/sh) over last year! Whoa. $12.70 if they hit the same $5.70 from this year plus the $7. IMHO, they probably won't hit $12.70, but it should be an incredible year if oil stays down and business is about the same.
    Jan 27, 2015. 08:56 AM | 3 Likes Like |Link to Comment
  • Apple: iPhone 6 Plus A Star, ASP To Rise [View article]
    Mr. Market is giving away Apple shares compared to the index values. Just taking a look at the forward PEs for this morning's snapshot--NSDQ 100, S&P 500 and Russ 2000 are all in the 17-18 range for forward estimates. Giving Apple half credit for their cash~$10, plus 17.5(PE) X 7.84(this year's est.) and we get a value of ~$147. That is if they hit estimates. If they beat, it should be higher. Indexing is so prevalent now and Apple is significantly underpriced compared to the indexes. Plug in the DJ Utilities valuation and we really take off on price! If we credit Apple's cash, Mr. Market is saying that the average utility's earnings should have a valuation over 50% higher than Apple's, and that the average Russell 2000 stock's earnings should be valued a little under 50% higher than Apple's earnings.
    Jan 26, 2015. 12:15 PM | 8 Likes Like |Link to Comment
  • Apple Earnings Preview: Up, Up And Away [View article]
    Bill, you always do a great and objective job. I think you are a little low on your iPhone ASPs, a little high on your iPad ASPs, a little low on your iPad sales. Otherwise, nearly perfect. I think the ASPs and other changes put them over 70Bn and $2.70. If Ming-Chi Kuo is right, as he often is, and my ASPs are right...look out Moon. GLTA.
    Jan 26, 2015. 08:53 AM | 5 Likes Like |Link to Comment
  • Apple Earnings Preview: Up, Up And Away [View article]
    Good for you. Nice to see some Semper Fi here on SA! A couple of interesting points: Bill is calling for a fairly low (IMHO) ASP. I think it will be about 700. But, I could be wrong because of currencies. The soaring dollar will definitely hurt ASPs, and I didn't think it would get nearly as high as it has. It is really going to hammer European sales for guidance. I figure around 66MM iPhones at an ASP of 700 will get them very close to 70Bn in revs! If some of the bullish analysts are right, and they sell 70MM iPhones, my ASP of 700 will provide the mother of all blowouts tomorrow. Watch ASPs in addition to units sold. Bottom line, though, is Apple is selling--today--at a very steep discount to the major averages, and that gives ZERO credit for their cash. The herd is indexing now, so Apple is either irrationally cheap, or the indexes are irrationally expensive. Apple would be selling for about $150 this morning with a typical index fund valuation. GLTA.
    Jan 26, 2015. 08:47 AM | 11 Likes Like |Link to Comment
COMMENTS STATS
2,212 Comments
5,930 Likes