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threeleaves

threeleaves
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  • United Airlines: An Analysis After The Sell-Off [View article]
    Any opinions out there regarding further consolidation possibilities? Bigs eyeing smalls? LCC or ULCC mergers? Other possibilities?
    May 23, 2015. 12:44 PM | 1 Like Like |Link to Comment
  • Why I Bought More American Airlines Today [View article]
    No offense intended to the author, but these are the types of articles on SA I could do without. Feels like a pure pump piece. No real info or insight that hasn't been hashed a thousand times before. More like an amateur blog, not an article. I don't mind bloggish type articles if they are somehow freshly written with a dose of insight or perspective, but this is just rehash.
    May 23, 2015. 11:03 AM | 2 Likes Like |Link to Comment
  • Scientific Games Corp.: Signs Of Stability Emerging [View article]
    And probably selling now. . . . Buy, hold, and wait for debt to decline. I think management is underselling (smartly) consolidation factor.
    May 21, 2015. 08:29 PM | Likes Like |Link to Comment
  • American Airlines: An Analysis After The Sell-Off [View article]
    What continues to intrigue me are the contradictions inherent in oil price effect on airlines. Just a couple months ago people were celebrating the windfall AAL would receive from lower oil. But last year I was worried what lower oil and higher margins would do to the competitive landscape and my fears have begun to play out.

    But I think it's a wash. Oil goes up: higher input costs but increased fares and restrained capacity. Oil goes down: lower input costs but cut fares and increased capacity. Bottom line: airlines are making money either way.

    Could AAL be bankrupt in a few years, once again? Perhaps. But it's WAY too soon to make that determination (think Larry Livingston and his treasure in the distance analogy); and with this type of precipitous price action , the market is trying to anticipate disaster. Sorry, too soon for that. If nothing else, there is a great short to medium term trade here. Not sure how much shortsellers are involved here--I doubt very much but hope they pile in. The faster this goes down the better. (Just stay capitalized, people!)

    Lots of sentiment involved here. And in my view, lots of opportunity in sentiment. i.e. AAL mispriced here. And will probably become more mispriced as negative sentiment builds through media attention. (Think aapl in 2013. NOT comparing aal to aapl, just pointing out the gifts that negative media give us.) Herd mentality in airlines up and down. Nothing short of a stampede happening as we speak.

    Next on radar: 1) May numbers from legacy carriers. 2) government response to mid-east airline inquiry. 3) June numbers. 4)earnings.

    What to completely ignore: 1) price of oil. 2) hedge fund 13f's adding or subtracting (can you say rear view mirror?!)


    May 21, 2015. 07:47 PM | 1 Like Like |Link to Comment
  • American Airlines And Halliburton - Ultimate Pairs Trade To Hedge Out Oil [View article]
    I think your 1 year price chart comparison could be somewhat misleading. The dramatic decline in AAL in October 2014 is completely related to ebola events. Take out that dip and the story looks different. The beauty of AAL right now is that its stock has seen very little speculative benefit from the steep fall in oil prices. Many who bought AAL on short term oil speculation are getting burned and that's fine by me.

    I'm always looking to buy oil but I think this hedge line of thinking with AAL at these stock prices is wrong. When oil was at $100 I was fine with that, and I expressed it in some comments that I made in August about airlines, before the oil crash. I also expressed at that time that I was more worried about oil price deflation than inflation, even as I owned stock in airlines. SO MUCH money-losing chatter about correlations between airline stock prices and oil prices. Buy HAL because you like HAL and you want to commit capital to it, not to hedge AAL exposure to oil. I'm waiting for the month when oil surges and AAL surges right along with it.
    May 13, 2015. 03:05 AM | Likes Like |Link to Comment
  • Distractions Hindering American Airlines [View article]
    The conversation with the major airlines always seems to be about why their stocks are so undervalued on a p/e basis. We all keep throwing about the same reasons: debt load and negative perception of industry caused by historical realities. It will take time for those reasons to subside. In the meantime there is uncertainty and volatility.

    Stone fox's April 25 blurb had a title that explains why I'm relatively comfortable in airlines as opposed to the broader market. I think it will be a long time before those perceptions change, and I love that fact. To me it means an opportunity to slowly build longer term positions. It also means years of opportunities in the volatility that persists.

    For those afraid of the volatility, I think that is a mistake. Be prepared for the volatility. Expect it. Embrace it. And use it to your advantage.
    May 13, 2015. 01:11 AM | 1 Like Like |Link to Comment
  • North Dakota rig count at lowest level since November 2010 [View news story]
    If I read one more comment or read one more news headline or hear one more pundit remarking how oil is getting hit by a strong dollar I think I am going to *&&$#@! myself. When are people going to get it into their skulls that there is a very simple structural shift: U.S. oil production. That's it. It is not more complicated than that. This shift has effected many things, including the rise in the dollar. And for people who clamor that supply hasn't increased enough to change pricing fundamentals, you are missing one thing: potential supply. It wasn't there before. It is now.
    Jan 13, 2015. 12:18 PM | 2 Likes Like |Link to Comment
  • North Dakota rig count at lowest level since November 2010 [View news story]
    @ocean man . . . when Harold Hamm scrapped his hedges at $80bbl, he made a comment much like yours. But don't you see the irony? By saying that the oil price is wrong now, you are admitting that the oil price CAN be wrong. If oil prices can be wrong, why do you assume that the oil price was not wrong at $90?
    Jan 13, 2015. 09:06 AM | Likes Like |Link to Comment
  • Here comes the new airline ETF [View news story]
    Funny how Guggenheim etf shuts down just before airlines gain some traction. I've been hoping another wouldn't pop up but oh well. Could be a good hedge vehicle if you're inclined that way, but imagine shares will be hard to borrow.
    Jan 5, 2015. 06:57 PM | Likes Like |Link to Comment
  • Delta Air Lines: Hedging Gone Awry [View article]
    re:details on 10q, hedged E&P concerns do reveal detailed accounts of their hedge book.

    On a separate note, that 850 mill loss you mention would be through the entirety of 2015, not Q4 alone--assuming their book has downside protection below the 20% drop on that chart. Whether or not that protection exists is the type of transparency I would like to see Delta exercise. Jet fuel looks to be right at that 20% decline since $2.57. If it goes below that, shouldn't they at least post another chart for investors in an 8-k revealing figures below the 20% mark?
    Dec 5, 2014. 06:39 PM | Likes Like |Link to Comment
  • Delta Air Lines: Hedging Gone Awry [View article]
    Can anyone shed some light on the degree of transparency required by the SEC of airlines as to their hedging programs. Those hedging charts Delta provides in their 10-q's somehow leave a lot to be desired. I was actually thinking of putting a list of questions together for investor relations but I'm not sure what they will be willing to divulge. If I recall correctly, in the interview with Charlie Rose, Anderson touts his experienced trading desk in Houston and says they are active in making changes to the portfolio. How active are they, how much autonomy and/or power do they have, and what policies are in place to prevent a trader from going rogue? I'm not sure what the exact scenario was with John Ruggles was in 2012, but it sounded like a situation that got out of their in control. I could be wrong on that.

    I don't want to hijack this thread, but if anyone is interested in helping me approach IR with this issue, please comment or PM me.
    Dec 5, 2014. 03:34 PM | Likes Like |Link to Comment
  • Continental Resources' Harold Hamm - Not The First Billionaire Energy CEO To Boldly Remove His Hedges [View article]
    Yes, everyone has known about U.S. production, but as per your comment it is not appreciated enough, hence not reflected in price properly. The US is battling Russia and Saudia Arabia for top producer in the world! . . . Investors and the public still can't wrap their minds around this, and it is 100% the reason why brent has been in decline, aided by china slowdown. Sometimes the obvious answer is the right answer.
    Nov 17, 2014. 11:19 AM | Likes Like |Link to Comment
  • Continental Resources' Harold Hamm - Not The First Billionaire Energy CEO To Boldly Remove His Hedges [View article]
    Hamm: "Our view ultimately comes back to global supply and demand which, in my opinion, has not fundamentally changed in the past 3 months. Certainly, not enough to justify a sell-off in Brent and WTI that has occurred."

    The problem with this statement is that you could just as easily postulate that $95 for WTI was inflated, and that only now is the price of oil more realistic, even though the supply demand picture hasn't changed.

    Now a good proxy stock. I would expect even higher volatility than normal.
    Nov 14, 2014. 09:11 AM | 1 Like Like |Link to Comment
  • Copa Airlines: The Numbers Reveal A Great Opportunity [View article]
    So, according to their prospectus, their tax rate has to do the fact that many of the countries they service do not impose income tax; and, Panama only charges against the percent of revenue that is flown over Panamanian territory. At least that's the way I understand it. That seems like a pretty good scenario when you factor the amount of territory they cover that is outside Panama. However, you have to wonder about the risk of new taxes imposed by the countries they service.

    Regardless, what I don't understand is their apparent monopoly at Tocumen airport. If being a tax-advantaged Panamanian airline is so profitable, why haven't other Panamanian airlines emerged to compete in the market there?
    Oct 25, 2014. 11:23 AM | 2 Likes Like |Link to Comment
  • Is Dick's Sporting Goods Worth Considering? [View article]
    My problem with DKS, and with those profit growth forecasts you mention, is the competitive landscape. I think eventually stores like Academy Sports eat Dick's lunch. Where I live, in Nashville, I see Dick's as a glorified apparel retailer. It's ironic that they got their start as a bait and tackle shop, because their fishing sections in Nashville are horrible. They have many aisles for lures and tackle, but it's obvious they are more worried about inventory control than providing tackle that local fisherman would use. In other words, their selection is skimpy. In Nashville, if you are a fisherman you go to Academy or Bass pro shops. And there are A LOT of fisherman in middle tennessee. Again, ironic since Dick's started as a bait and tackle shop. They are much better than Academy at golf, but I think the headwinds in golf will be here for a long while. The way I see it: too much inventory over the past decade. I am an avid golfer, and see no reason to buy a new set of $1000 irons when I can get a set made two years ago for $250 on ebay. The golf explosion is over for the next decade, in my opinion. So, where does that leave Dick's? Like I said, glorified apparel retailer, not a sporting goods store. At least here in Nashville.

    Of course I realize that the above is anecdotal. The company has been profitable so they must be doing something right. I wonder if they have stores closer to their origins that are superior to the ones where I live. Regardless, I think their bread and butter is apparel. Nike, Under Armour, Adidas, Columbia etc. But where is their competitive advantage?
    Sep 12, 2014. 05:10 PM | Likes Like |Link to Comment
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