jfk787nyc
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Delta Stock Solid Investment?

Thu May 10, 2007 11:00 pm

Can someone please advise if they believe it is worth investing into DAL.

There stock is at around $19 per share today.

But, all of there competitors are around or over $40 a share.
 
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TVNWZ
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RE: Delta Stock Solid Investment?

Thu May 10, 2007 11:31 pm

Historically, airline stocks have been a very bad long-term investment.
 
gemini573
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RE: Delta Stock Solid Investment?

Thu May 10, 2007 11:48 pm

DAL at that price seems like a good buy to me.

If there is one airline stock that I would invest long term, it would be LAN airlines; symbol LFL. It traded at over 80.00 a share yesterday. It has retreated slightly today. I'm very bullish on this stock.

[Edited 2007-05-10 16:49:58]
 
atlaaron
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RE: Delta Stock Solid Investment?

Thu May 10, 2007 11:50 pm

Remember that per share price means NOTHING. You need to multiply that by the number of shares outstanding and you get the market capitalization. Which is also listed on everything you would look at such as Yahoo finance. Compare the market caps of the various airlines and then decide if you think Delta is a good investment.

Personally, I intend to buy some of their newly listed stock but not until it finds a bottom. Wait till it trends back up for a day or two, at least that is what I am doing. Oh and the poster above is correct, airline stocks are not a long-term investment. So you need to know when to get out.
 
FlyPNS1
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RE: Delta Stock Solid Investment?

Thu May 10, 2007 11:51 pm

As a short-term speculative purchase, I think DL's stock might be worth buying. Right now, the stock's price is being dragged down a bit by worries that domestic demand is softening and fuel prices are rising. However, given DL's low-cost structure (relative to the industry) and shrinking domestic footprint, you might eventually see a nice run-up in price. This run-up probably won't start until DL reports some financials that are better than the industry (which could happen in July when 2nd quarter numbers come out).

For a long-term investment, I would say DL's stock (like most airlines) is a bad buy. Weakening domestic demand and rising fuel prices are bad enough news, but an eventual downturn in the economy will tank DL's stock (as well as most other airlines).
 
jfk787nyc
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RE: Delta Stock Solid Investment?

Thu May 10, 2007 11:53 pm

LAN is so expensive because they only have 68 million shares floated on the stock market.

where DELTA has 193.8 million


Does anyone know what was the profit for LAN last year?
 
masseybrown
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 12:35 am

There is bearish sentiment that Delta stock will fall to around $15 - at which point it might be a buy.
 
InnocuousFox
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 12:45 am

I day-trade airline stocks. I would wait for a bit and see where it bottoms out. Right now, the best bets are CAL and AMR (using their ticker symbols). The trick with airline stocks is the volitility. You can make a decent amount of money just riding the waves every few days. (Trailing stops work wonders!)
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AADC10
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 12:59 am

I do not know what your definition of a "solid" investment is but that is hard to apply to any airline, much less one that just emerged from Ch. 11. Another terrorist airline attack could send several airlines to Ch. 7 within days. Actually DL may be risker than other post Ch. 11. airlines like UA or US because of their aggressive expansion. If the economy slumps sharply, then DL will end up begging someone to buy them.
 
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SLCUT2777
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 1:14 am

Quoting AADC10 (Reply 8):
I do not know what your definition of a "solid" investment is but that is hard to apply to any airline, much less one that just emerged from Ch. 11. Another terrorist airline attack could send several airlines to Ch. 7 within days. Actually DL may be risker than other post Ch. 11. airlines like UA or US because of their aggressive expansion. If the economy slumps sharply, then DL will end up begging someone to buy them.

Since 2000, airline stocks have been highly volatile. Even WN is trading at only about $14-18 per share over the last year. Still further, even US has tanked considerably since the first of the year, losing 30-40% of its value. That said, I don't think DL is any riskier than UA, US, AA or CO.  twocents 
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panamair
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 1:15 am

Quoting MasseyBrown (Reply 6):
There is bearish sentiment that Delta stock will fall to around $15

Target prices so far:
Prudential: $14
UBS: $17
Goldman: $25
Morgan Stanley: $27-29

which basically tells you nothing...
 
masseybrown
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 1:55 am

Quoting Panamair (Reply 10):
which basically tells you nothing...

...especially without any timing indicated. The former creditors who are anxious to get some cash out of their gobs of new stock will keep pressure on prices for a time while the stock passes into the hands of longer-term holders. So I believe the stock will dip and then recover at a pace dictated by the company's performance. It's a tempting short at the moment.
 
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CV880
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 2:13 am

Quoting JFK787NYC (Reply 5):
where DELTA has 193.8 million

According to Marketwatch, float is 240M, WSJ, about 235M. There are also restricted shares issued to management, which can't be traded and also creditor shares in litigation.
 
Sean-SAN-
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 2:27 am

Currently DAL has a market cap almost 50% higher than AA... So the stock price doesn't mean anything. I agree, the stock will likely go lower. Too bad I can't buy put options on it yet.
 
Curiousflyer
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 2:35 am

Airlines are very speculative, I certainly would not invest in DL either. The next terrorist event will send the weaker ones back into bankruptcy, DL/UA/NW are the most fragile. Your shares could lose 50% in a day. Not a risk I'd take.
 
InnocuousFox
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 2:57 am

Quoting MasseyBrown (Reply 11):
...especially without any timing indicated.

Usually those are 1-year price targets.

BTW, you non-traders need to get over the actual dollar amount of stock prices. I stock price could get up to $100, do a 2:1 split and be $50 the next morning - and yet the company is the same. Always view stock prices with regards to the following ONLY:


  • Percent changes over time to see the relative motion
  • Local or global highs and lows to see what investor sentiment is
  • When comparing stocks, use PE ratios, not prices.
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CV880
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 4:23 am

AP
Delta Air Lines Exec VP Sells Shares
Thursday May 10, 11:58 am ET
Delta Air Lines Exec Vice President, Sales & Marketing Lee A. Macenczak Sells 9,349 Shares

NEW YORK (AP) -- An executive vice president of air carrier Delta Air Lines Inc. sold 9,349 shares of common stock, according to a Securities and Exchange Commission filing.

In a Form 4 filed with the SEC Wednesday, Executive Vice President of Sales and Marketing Lee A. Macenczak reported he sold the shares Tuesday for $19.39 to $19.83 apiece.

Insiders file Form 4s with the SEC to report transactions in their companies' shares. Open market purchases and sales must be reported within two business days of the transaction.

Delta is based in Atlanta, Ga.
 
jetdeltamsy
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 4:42 am

I think anyone, rich or poor, who invests a nickel in the airline industry is a fool.

The business has not been profitable since it was created. There have been profitable cycles, but unless you know when to get out, you lose every time.

The industry is faced with extremely urgent uncertainties...namely fuel supplies and price. If fuel were suddenly to become in short supply or to spike dramatically in price, it would bankrupt and probably shut down almost every non-state supported airline out there. And I think something like this is quite likely in the cards...probably within the next 5 years.

So my advice is if you simply have to invest in the industry, do so only with money you can afford to lose. If you make money, you'll be pleasantly surprised.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
EMBQA
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 5:07 am

Quoting JFK787NYC (Thread starter):
Can someone please advise if they believe it is worth investing into DAL

As said above, airlines are......as a whole....bad investments.

Quoting SLCUT2777 (Reply 9):
Even WN is trading at only about $14-18 per share over the last year.

Southwest rarely trades above that and is pretty much the base line for them. I really don't think they have ever broken $40
"It's not the size of the dog in the fight, but the size of the fight in the dog"
 
justloveplanes
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 5:09 am

Quoting Sean-SAN- (Reply 13):
Currently DAL has a market cap almost 50% higher than AA... So the stock price doesn't mean anything. I agree, the stock will likely go lower. Too bad I can't buy put options on it yet.

According to Yahoo, DAL market cap today is 3.9 Billion and AMR is 6.4 billion. The 11 billion market cap came from estimates by DL management what the company would be worth post BK. Still not there.
 
InnocuousFox
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RE: Delta Stock Solid Investment?

Fri May 11, 2007 5:36 am

Quoting Jetdeltamsy (Reply 17):
I think anyone, rich or poor, who invests a nickel in the airline industry is a fool.

[snip]

So my advice is if you simply have to invest in the industry, do so only with money you can afford to lose. If you make money, you'll be pleasantly surprised.

I have been making quite a bit of money in the airlines. Just know where to be when. It beats the hell outta buy-and-wait on a nice stable blue chip stock.

Quoting EMBQA (Reply 18):
Southwest rarely trades above that and is pretty much the base line for them. I really don't think they have ever broken $40

Again with the dollar amounts! Sheesh, people. Share price means NOTHING without a frame of reference. How many times have they split?

[list:1]
  • August, 1990: 1.5:1
  • July, 1992 2:1
  • July, 1993 3:2
  • November, 1997: 3:2
  • August, 1998 3:2
  • July, 1999 3:2
  • February, 2001: 3:2


    So... They are at ~ $14 today. Let's run those splits backwards to see what the share price would have been without them...

    $22.50
    $33.75
    $50.63
    $75.94
    $119.91
    $227.81
    $341.72 <- This is what the price would be if they had not split at all since 1990!

    The point is that they were splitting the stock because they WANTED to keep the price in the range of the teens to 20s. That is a common strategy to make a stock more accessible to the masses. In the days where almost every trade is an "odd lot" trade (not 100 shares), this is not as important.

    Again, stop posting dollars and saying it is good or bad. What it IS is ignorance of how the market works. Now THAT is dangerous.
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    airfrnt
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    RE: Delta Stock Solid Investment?

    Fri May 11, 2007 5:37 am

    Quoting JFK787NYC (Thread starter):
    Can someone please advise if they believe it is worth investing into DAL.

    There stock is at around $19 per share today.

    But, all of there competitors are around or over $40 a share.

    No. I quote Bob Crandall:

    "I would never let my employees invest in Airlines. It's not a good business."
     
    incitatus
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    RE: Delta Stock Solid Investment?

    Fri May 11, 2007 5:46 am

    Quoting InnocuousFox (Reply 7):
    I day-trade airline stocks. I would wait for a bit and see where it bottoms out.



    Quoting InnocuousFox (Reply 20):
    What it IS is ignorance of how the market works. Now THAT is dangerous.

    I am somewhat surprised that the same poster wrote these two statements. If you can tell when "it bottoms out", let me know, I will pay you millions for the information.

    As for Delta, as pointed out, airlines are not usually good investments in the long term, which does not preclude them of being good short term investments. But the market cap of Delta is well above other airlines. If I had any DAL stock right now, I would be selling and speculating on a mix of Jet Blue and Continental.
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    vega
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    RE: Delta Stock Solid Investment?

    Fri May 11, 2007 6:20 am

    Let's see now, DAL achieved a price of $22.79 on it's first trading day after emerging from BK and has since dropped to $19.70 - that's about a 14% loss in just 2 weeks. Although, the airline industry as a whole has essentially done the same, typically the investment community supports an emergent company, especially one which has been as vocal about it's future prospects as DL. Also, note that the DL CEO (Grinstein) reached deep into his pockets on 5/3/07 and bought a whole 1000 shares - and that is after he Disposed of 28K shares on 4/30/07 as the price was sinking ! Not a lot of confidence DL is on a path to a profitable future from my perspective.
    We are but a moment in this vast Universe and when gone we will never have existed.
     
    InnocuousFox
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    RE: Delta Stock Solid Investment?

    Fri May 11, 2007 6:25 am

    Quoting Incitatus (Reply 22):
    If you can tell when "it bottoms out", let me know, I will pay you millions for the information.

    I wrote a bit too quickly without qualification. I meant after these first few days of selling off. In a week or so, we will see it stabalize a little bit - or as much as can be expected from an airline.  sarcasm 

    Quoting Incitatus (Reply 22):
    I would be selling and speculating on a mix of Jet Blue and Continental.

    Yeah, I've been making my money on AMR and Continental. JetBlue and AirTran have been good on and off but I don't want to spread too thin.

    USAir was cool when it came out of bankruptcy - trippled in a year. United was not as hot and is still struggling.
    Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
     
    panamair
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    RE: Delta Stock Solid Investment?

    Fri May 11, 2007 7:11 am

    Quoting Vega (Reply 23):
    Let's see now, DAL achieved a price of $22.79 on it's first trading day after emerging from BK and has since dropped to $19.70 - that's about a 14% loss in just 2 weeks. Although, the airline industry as a whole has essentially done the same, typically the investment community supports an emergent company, especially one which has been as vocal about it's future prospects as DL. Also, note that the DL CEO (Grinstein) reached deep into his pockets on 5/3/07 and bought a whole 1000 shares - and that is after he Disposed of 28K shares on 4/30/07 as the price was sinking ! Not a lot of confidence DL is on a path to a profitable future from my perspective.

    The stock's lackluster performance since 4/30/07 has more to do with the fact that creditors who have been given stock and who have not seen any money for 19 months wanted to cash out from the beginning. Also, not all of the shares have been issued yet due to some remaining claims that need to be resolved. It will take some time before the stock finds its 'correct' footing with medium to long-term holders. As one of the analysts says in the linked article:

    http://www.smartmoney.com/onedaywond...m?story=20070508&afl=yahoo&pgnum=2

    "...we're working through a period of instability on the price because there are a lot of sellers and buyers who aren't normally involved. When those shares have all finished changing hands, we'll be able to reach a steady state."

    If you look at what Prudential (who predicts a $14 per share price) says, "...while current prices aren't sustainable, largely because Wall Street is looking at the airlines sector with a bit more skepticism, Delta's core operations appeared stronger for the extensive reorganization. Prudential's McAdoo continues to say "Delta Air Lines is emerging from bankruptcy with costs reduced, with its network realigned to enhance profitability, and with its work force seemingly energized toward returning Delta to its long held position as one of strongest of the legacy airlines," he wrote.

    Another analyst says "Delta may be in a somewhat stronger position that will let investors chart a course to profits, thanks to a weak U.S. dollar that has made international traffic an important growth opportunity. While U.S. travelers may not be flocking to Europe this summer, there's plenty of demand for flights to the United States, where goods, lodging and food are all cheap relative to the strong euro. "

    Point is that while some analysts may view DL's price of $20-$23 as too high, their issue is with the price itself, not necessarily the airline's prospects for a profitable future.
     
    dc10hound
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    RE: Delta Stock Solid Investment?

    Fri May 11, 2007 8:49 am

    Quoting Jetdeltamsy (Reply 17):
    I think anyone, rich or poor, who invests a nickel in the airline industry is a fool.

    I think it was Warren Buffet that said something along the lines of "the best thing that could happen for airline investors is that the Wright brothers were never born..."  Wink
    "Eagles soar. But weasels never get sucked into jet intakes.."
     
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    CV880
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    RE: Delta Stock Solid Investment?

    Fri May 11, 2007 9:17 am

    Quoting Justloveplanes (Reply 19):
    According to Yahoo, DAL market cap today is 3.9 Billion and AMR is 6.4 billion. The 11 billion market cap came from estimates by DL management what the company would be worth post BK. Still not there.

    http://aviation.beloblog.com/archive...07/05/delta_back_near_the_top.html

    From the Dallas Morning news.....actual issued shares are 400M, so at today's valuation, a little under $8B market cap. The analysts had forecast the stock to begin trading on May03 at over 25, which would have been 10B. Some of the shares are not being traded as they are in creditor litigation and management stock options and who knows what else.
     
    gemini573
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    RE: Delta Stock Solid Investment?

    Sat May 12, 2007 12:18 am

    Quoting JFK787NYC (Reply 5):
    Does anyone know what was the profit for LAN last year?

    Don't know what it was for last year. I can say this. As long as I've owned this stock, they have recorded double digit record passenger and cargo figures month after month. For April 07 figures, passenger traffic was up 29.5% vs the same month last year. As of 11th of May, the stock has gone up $3.82 to $83.65.

    It also helps that LAN has signed a commercial alliance with TAM.
     
    justapassenger
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    RE: Delta Stock Solid Investment?

    Sat May 12, 2007 2:26 am

    I have done reasonably well investing in airline stocks and I am starting to look at Delta. In my opinion, the success of Delta as an airline and as a stock will depend on the morale and service of its employees. Their business plan seems to mimic Continental’s (i.e., international expansion and meals, etc.). If they offer good service, they will do well if not they will be another UA. Anyone have any thoughts on how well they can deliver their services given the pay cuts that their employees have taken?
     
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    CV880
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    RE: Delta Stock Solid Investment?

    Tue May 15, 2007 6:25 am

     
    CupraIbiza
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    RE: Delta Stock Solid Investment?

    Tue May 15, 2007 9:41 am

    The posters question was SOLID investment. The answer is clearly a NO.
    If you want a SOLID investment look outside the airline industry.
    My perosnal choice is mining at the moment. Very low P/E ratios, also the big miners have a unique problem at the moment. Making too much profits and not knowing what to do with it. This is on the back of a mining boom (ie high commodity prices) that is showing no signs of faltering.
    Look at BHP Billiton or Rio Tinto. - These guys are diversifyed geographically as well as across almost all commodity groups. You cant get hurt
    Everyday is a gift…… but why does it have to be a pair of socks?
     
    InnocuousFox
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    RE: Delta Stock Solid Investment?

    Tue May 15, 2007 12:50 pm

    I made a ton on Arch and Peabody Coal a couple of years back. Not so much now. Railroads are doing well at the moment. Also, I'm in FedEx and UPS. There's a couple of airlines for ya!
    Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
     
    masseybrown
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    RE: Delta Stock Solid Investment?

    Tue May 15, 2007 12:59 pm

    For the Delta fans, a good company doesn't mean a good stock and a good stock doesn't mean a good company - in the short run, anyway.

    FWIW, however, DAL continued downward, closing at 18.89 today.
     
    InnocuousFox
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    RE: Delta Stock Solid Investment?

    Tue May 15, 2007 10:33 pm

    Yeah, but the airline index was down as well. You need to view it compared to the rest of the airline industry on any given time period.
    Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
     
    dallasnewark
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    RE: Delta Stock Solid Investment?

    Wed May 16, 2007 2:01 am

    Quoting JFK787NYC (Thread starter):
    Can someone please advise if they believe it is worth investing into DAL.

    There stock is at around $19 per share today.

    But, all of there competitors are around or over $40 a share.

    You should never look at the stock price, don't fall into the "Cheap Stock" pitfall. Look at shares outstanding, that would give you a better measure.

    Investing into the airline industry is a bit risky, the industry is cyclical, look in the past what a crash of an airliner did to the share price of an airline.

    Delta has just emerged from bankruptcy, and can't go into one just as easily due to the new regulations, so in the short run they may be a good investment, they should appreciate a bit
    B732/3/4/5/6/7/8/9, B742/4, B752/3,B762/3/4, B772/3, A306, A318/9/20/21, A332/3, A343/6, MD80/83/88, L1011, TU104/134, F
     
    masseybrown
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    RE: Delta Stock Solid Investment?

    Wed May 16, 2007 2:02 pm

    Quoting InnocuousFox (Reply 34):
    Yeah, but the airline index was down as well. You need to view it compared to the rest of the airline industry on any given time period.

    OK. In the past 5 days (about how long the new DAL has traded) the airline index XAL is down 3% and DAL is down 9%. DAL is now worth about 25% less than US's last buyout offer. I hope the former unsecured creditors feel good about "saving" the company, because they are losing their shirts.

    I know, I know ... take the long view.  Wink