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Airlines to short
- Thread starter m22au
- Start date
Airlines have done extremely well since my last post in this thread on
14 September 2012.
The $XAL has more than doubled, but the S&P 500 is "only" up by about 33%.
However in the last couple of weeks as $BRENT rose above $110, airline stocks suffered.
The worst performers have been non-US airlines, such as GOL, AF (France), LHA (Germany). CEA and ZNH have done poorly in the last year, but their volume on the NYSE is quite thin.
Of the US airlines, SKYW looks the weakest, and of the big-four, UAL looks weaker than LUV, DAL and AAL.
14 September 2012.
The $XAL has more than doubled, but the S&P 500 is "only" up by about 33%.
However in the last couple of weeks as $BRENT rose above $110, airline stocks suffered.
The worst performers have been non-US airlines, such as GOL, AF (France), LHA (Germany). CEA and ZNH have done poorly in the last year, but their volume on the NYSE is quite thin.
Of the US airlines, SKYW looks the weakest, and of the big-four, UAL looks weaker than LUV, DAL and AAL.
Shorting airlines because of oil is risky. Capacity is a bigger driver : and right now there isn't much of it. So airlines can pass oil prices on.
Airlines have done extremely well since my last post in this thread on
14 September 2012.
The $XAL has more than doubled, but the S&P 500 is "only" up by about 33%.
However in the last couple of weeks as $BRENT rose above $110, airline stocks suffered.
The worst performers have been non-US airlines, such as GOL, AF (France), LHA (Germany). CEA and ZNH have done poorly in the last year, but their volume on the NYSE is quite thin.
Of the US airlines, SKYW looks the weakest, and of the big-four, UAL looks weaker than LUV, DAL and AAL.
If oil breaks $120, they will all tank.
Shorting airlines because of oil is risky. Capacity is a bigger driver : and right now there isn't much of it. So airlines can pass oil prices on.
I disagree. Airlines are the most sensitive sector to substantial increases in the price of oil.
They get hit on the revenue side (customers cancel discretionary flights), and they also get hit on the expense side (higher oil prices).
There is a limit to the extent to which they can pass on higher oil prices to customers. Eventually there comes a point where it leads to lower revenue.
Depends what % each respective airline has hedged their exposure to jet fuel
Exposure to rise in crude will be different for each
Hope you bothered to look at their financials to ascertain (from the notes) the % jet fuel hedged (& duration) before blindly shorting
Exposure to rise in crude will be different for each
Hope you bothered to look at their financials to ascertain (from the notes) the % jet fuel hedged (& duration) before blindly shorting
I use the Altman Z-score as one of my principal trading tools both on the long as well as the short side. However I wouldn't recommend automatically shorting a stock just because it has a low Z-score.
Also don't use it with Chinese stocks as the balance sheets are too unreliable:eek:
There have been numerous tests of the effectiveness of the Altman Z-score over the years. Morgan Stanley did an interesting study in 2009.
@yabz @Pekelo
Sirs, indeed a super old post but I see you both use the Altman Z-Score to as a tool for stocks. I am interested in the current Z-Score for AAL, and cannot seem to find a free version of the Z-Score easily available on the internet. Any information is appreciated.
Thank you