Now a good time to buy airlines/cruise stocks?
My thought process is that most of these companies represent a huge bargain trading at 60+% discount off the highs.
Thoughts?
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normally I'd say bet against "smart money" but in this case the smart money is warren buffett.
wouldn't touch em with a 10 foot pole. not saying you can't make money, but I have serious doubts about them as a buy & hold investment.
https://nypost.com/2020/05/04/airline-stocks-plunge-after-buffett-dumps…
Most of these companies just raised multiple billion dollars of debt just to survive the covid-19 liquidity crunch. EPS going to be hammered temporarily by reduced consumer demand but also longer term as a result of servicing a sizeable new debt load so would obviously caution against benchmarking relative to historical levels.
There is only like 2 which I would touch, and part of that is because I am a big believer in the product and experience they offer.
Seconding thebrofessor's comments - the Buffet/Icahn/etc types of smart money don't just lose money/sell off because of gut reactions - there is something wrong even with the airlines who were the strongest from a fundamental perspective. Definitely cannot think of a single long position I would go into right now.
As an investor with a very long time horizon, these companies (especially the airlines) are bound to recover eventually right? As soon as things start looking up for them, my investment will start paying off. The stocks are just so low right now that I see it as an overreaction.
well they could enter ch. 11 and then you get wiped. american airlines' 2011 restructuring left old shareholders with 3.5% of NewCo.
Is that likely though? I feel like the government will prop them up at the very least/ bail them out if absolutely necessary
edited my comment between when i saw your first and most recent post. airlines fail all the time, wouldn't count on a bailout a couple of years down the line.
https://en.wikipedia.org/wiki/List_of_airline_bankruptcies_in_the_Unite…
note the wave of bankruptcies a few years after 9/11. united in 2002, air canada in 2003, us airways in 2004, northwest/delta in 2005. wouldn't be surprised to see a similar trend as airlines lever up on the cheap, fed-supported credit currently available.
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