Both are addressing that issue.
United, though, remains the closest to Neidl's danger zone, with a 14.1% ratio of cash to revenue. That ratio will rise a few points after United picked up $600 million in cash in July by renegotiating its affinity credit card deal with Chase Bank. Neidl's also concerned that United's projected cash burn for the coming winter will be larger than at most other airlines.Not that fundamentals matter but....
a very useful breakdown of airlines one by one can be found here.
******************************
STRONGEST
28. 5%: Southwest
LIKELY SURVIVORS
21.6%: AMR
27.4%: Alaska
23.2%: Continental
16.1%: Delta
24.5%: Northwest
STRUGGLING
19.5%: AirTran
29.1%: JetBlue
14.1%: UAL
17.4%: US Airways *****************************
However, in the gambling (Wall Street) culture one would actually say if you are going to buy an airline why bother with a Southwest (LUV) (whose stock has held up reasonably well) when you can make the most profit (if you time it correctly) by buying the worst off (as long as the whole sector ramps together)?? These stocks actually performed far better than Ultrashort Oil & Gas (DUG) as an "anti-oil" play when crude fell from $140s to $110s. So as a hedge if nothing else they might be compelling. At some price. Note: Northwest (NWA) and Delta (DAL) are in merger agreement. As an example of why buying "worst" is better than "best"
- Shares of UAL (UAUA), United's parent, have risen nearly 350% in five weeks, while shares of Continental (CAL) and AMR (AMR), American's parent, have gone up about 150%.
You remember
UAL (UAUA) right? I called it out (sarcastically) as the best stock on the planet Tuesday (
Aug 19: Best Stock on the Planet: UAL) as it jumped to the mid $15s. With oil only up $10 since then, it's since
lost nearly a third of its value - in 2 days. But hey, it's holding its 50 day moving average ;) But again, buying this stuff is waking up each morning, rolling the dice on oil futures and if its red you win, black you lose.
