RE:This stock is just way too cheapERTguy wrote: When is the last time you found a stock trading at 2.5 times forward P/E? LF and OPEC next week should be a good catalyst for the sector. Lower for longer oil prices (unless OPEC makes a surprise announcement to support higher oil prices), and a strong LF should help erase concerns of reduced travellers due to the terrorist alert. We've been dealing with terror for decades but the fact of the matter is LF is stronger than ever. IMO this is trading like it was in the $2 level. The fact of the matter is this is a highly macro sensitive stock and has had to price in everything from a weakened economy, to terrorist attacks.
Yes the stock declines with currency, however the market needs to wake up and realize that this is the best environment for AC to work in (providing domestic capacity remains strong). This has pushed out legacy carriers south of the border and has given us the upper hand on transborder routes in a big way. I remember a couple years ago for example there were many routes from where I live to the Cayman Islands via United airlines, and they all have seemed to disappear.
Weak currency = reduced competition from US carriers, influx of tourism, cheaper oil prices, domestic passengers using domestic airlines instead of driving south.
I think this will make one final touch down to the low 10s, might even dip into the 9s. The price will not stay there. There is no way investors will look at a stock trading at 2 times earnings as a bad bet forever when they're raking in massive profits.
My outlook for 2016:
Oil price remains weak
demand remains strong (summer travel season will be overwhelmingly strong)
AC announces a dividend
Open skies agreement with China
increased credit rating.
I don't think anyone is really going to care when they're tired of seeing this go down time and time again after every good news that comes out about AC, its like this stock forgot about a whole years worth of good LFs even some good quarters and progress,improments to its business. 12s are just not good enough anymore we need 15 16s now... This is just depressing to watch, especially for me seeing nothing but blood red numbers everyday for the past few months on long term about lol this is why buffet says don't punches airlines.. anyone would think AC is a good buy at a low price but you just never kno what this thing might throw next.. although 10.50 has been support ever since this stock had a run to 12s.. id feel skeptical but iching to buy at the same time if i was new to this stock. watch out if 10.50 gets broken meaning if it falls to 10.20s and no bounce back up seems to go down more, if i had to do it again id slowly work my way in and not just dump alot of money in at once.