#10 - American Airlines (NASDAQ:AAL)
American Airlines (AAL) - For a company that did not need bad news, American Airlines (NASDAQ:AAL) has certainly had its share of it. Despite the obstacles facing the stock with the 737 Max grounding, the stock looks inexpensive compared to some of its competitors, notably Delta Airlines (NYSE:DAL) and Southwest Airlines (NYSE:LUV). However, the company announced on January 30 that it along with Delta would be temporarily suspending all flights to China due to concerns over the coronavirus. While American and Delta will almost assuredly not be the only airlines to cancel flights, the company did not need another setback to draw attention to its large debt. AAL stock has declined nearly 50% from its $50 price level in 2018. And the larger problem is there’s not a lot of reason to believe it will go up anytime soon. It may seem like piling on at this moment, but airlines have always been susceptible to “black swan” events. Right now, investors have little motivation to buy the stock.
About American Airlines Group
American Airlines Group Inc, through its subsidiaries, operates as a network air carrier. The company provides scheduled air transportation services for passengers and cargo through its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, DC, as well as through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney, and Tokyo.
More- Current Price
- $16.96
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $18.88 (11.3% Upside)
Assessing when to sell a stock can be like getting notice of a storm. When an analyst downgrades a stock it’s like a storm watch. Conditions are favorable for the stock to decline, but it may be too early to tell. This may be a time to more carefully monitor those stocks.
However, the world can be a complicated place. And fortunes for a stock can change overnight. These are like storm warnings. Forget anything the analysts are saying and take action now. Boeing (NYSE:BA) is a great example of an iconic American company that is seeing its stock under pressure due to “black swan” events that, by definition, analysts could not have initially perceived.
On the other end of the spectrum, there are times when a stock just gets overbought. When this happens, investors need to have the mindset that it’s okay to take a profit and live to fight another day. The tech bubble of the early 2000s and the housing bubble of 2007 taught investors that when things start looking too good to be true they usually are.
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