JetBlue buys Spirit Airlines
Spirit Airlines $SAVE has been the best performing airline stock over the past year after receiving takeover bids from both JetBlue $JBLU and Frontier $ULCC. JetBlue appears to have had the winning bid. Let’s take a closer look at this deal!

In February, $SAVE announced plans to merge with $ULCC leading to the stock’s outperformance. $JBLU then came in with a higher offer and on July 27th Spirit took it. There’s been some interesting price action as a result!

This merger combines two of the smaller players in the industry but the combined airline would have $11B in revenue and represent 10% of the industry according to Forbes.

Anti-trust regulators aren’t happy. They had previously sued to block a combination of American Airlines $AAL and JetBlue $JBLU.

Want to read about what JetBlue $JBLU needs in order for this deal to go through?

Read our full newsletter and sign up at to get it weekly!

post mediapost media
Did you travel over Memorial Day?
The surge in consumer demand, staff shortages, harsh weather, and high gas prices caused cancellations for many airliners.

Even still, could this increase in demand be an indicator of improved business fundamentals?

Although travel demand has risen in recent months, stock prices for top airliners have continued to fall. $UAL $ALK $AAL $JBLU $DAL $LUV

Counter to the drop in prices, these stocks have seen large increases in quarterly revenue production.

Not all growth is good growth.

As prices for fuel and staff shortages have put pressure on margins, only three of these airlines posted positive net income in their most recent quarter.

For some investors, free cash flow is the better measure of profitability as it shows the cash generated by a business over a given period.

What do you think? Are you a fan of airline stocks now that travel demand is booming?

If you are more of a fan of hotel stocks, or booking sites, Wiijii has you covered with these quick comparisons:

post mediapost media
I did travel over Memorial Day weekend--by car. And since I don't have a Tesla I was feeling well aware of the gas prices. Interesting to see $DAL topping revenue but with negative FCF. What's that about?
View 2 more comments
What to watch
Are you prepared to take on the markets this week? If not, here’s a helpful watchlist of some of the most anticipated events for the week beginning April 4th to help you navigate your investing and trading decisions. Like, share and save this post for reference. Also be sure to follow me so that you never miss any upcoming market catalyst events. If you find this helpful and would like to view more of my work, consider subscribing to my Patreon. Link in my bio. $SPY $ABBV $GD $TSM $QQQ $BTC.X $HOOD $TLRY $LEVI $AAL $DAL $UAL $LUV $CHNG $UNH $LMT
post media
If oil goes to $200, here's what I'm bullish & bearish on
$UBER $LYFT $DASH $GRUB and other gig economy transportation platforms
$AAL $UAL $DAL $LUV and other airlines
$KNX $JBHT $USX $SNDR and other trucking companies

$TSLA $F $GM $RIVN $LCID $FSR and other electric vehicle manufacturers
$SEDG $RUN $ENPH $TAN and other solar stocks
$XOM $CVX $OXY $PXD $COP and other oil stocks

Oil companies today have pricing power like never before. Automakers have pricing power like never before. Solar companies, they'll soon start jacking up their prices as demand for solar energy systems surges during the summer.

Meanwhile, fewer people are gonna use their vehicles to offer ridesharing services and food delivery services because already, fuel costs are eating up a majority of their earnings. Also, airlines will have to balance between finding ways to attract passengers to fly with them (through lower prices) and not deterring them through higher prices (since they want to pass down the higher fuel costs to customers).

Trucking companies have it the worst. The industry has been commoditized as all truckers are essentially independent contractors with their own trucks and they do their own deliveries. The smaller companies are more vulnerable to high oil prices. Meanwhile, the larger trucking companies will have to bump pay for truckers to justify them making deliveries amid the high fuel costs.

These times are unprecedented. We need to drill more oil. Bring back the fracking revolution. The OPEC cartel members have an incentive to produce a lot more oil than their current production target.

Reactivating nuclear power plants takes months or even a few years. Quadrupling down on renewables requires heavy investment and a lot more raw materials, which we are currently struggling to import. Plus, transitioning to a green energy economy takes a very long time. The green energy solutions we currently have aren't dependable. The wind doesn't blow all the time. The sun doesn't shine all the time and it doesn't shine every day and every month. Geothermal plants and hydroelectric plants can only be built in certain places. Biomass may seem viable but we don't want to cause food prices to rise because we're now removing food supply for the sake of energy production.
I don't argue that higher oil prices are good for ALL EV makers, but I can't rationalize the valuations of $RIVN $LCID $FSR and others. While I do believe $TSLA is wildly undervalued (watch their EPS growth this year), too much unearned credit has been given to others trying to follow in tesla's footsteps. These new players have a long way to go before justifying their current valuations, let alone any future growth.
Add a comment…
Alberto Wallis's avatar
$23.8m follower assets
Upcoming Earnings Calendar (Jan 24-28th) - BIG week ahead!
Hey guys! Here's the upcoming earnings calendar! Definitely a very busy week ahead. Here's what I'll be looking at:

  • $MSFT - Can Azure keep its growth rate? Will a slowdown cause a sell-off similar to the one $NFLX had?
  • $TSLA - Post earnings reaction. This is one of the few high-growth stocks that has shown relative strength. Let's see if this changes post ER.
  • $LOGI - Is demand for gaming peripherals still strong? May be an early indicator of videogaming strength.
  • $AAPL - It's always interesting to hear what Apple is doing.
  • $V - Data on consumer spending.
  • $CVX - General comments on the energy market.

If you'd like an easier way to track earnings dates, you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.





post media
Ian Gray's avatar
$43.9m follower assets
The Compounders' Cup 2021
The average underperformance of the tournament field is currently (44.9%).

What a difference a year makes!

Last December, I ran a tournament titled "Compounders' Cup 2021" where Twitter users voted on which company would have the best return in 2021.

$SE beat $TDOC in the final

Despite all of the baskets underperforming the market, picking $SEAS the champion was not a horrible choice.

The correct answer out of this field would have been $NETWITH 55 points of outperformance.

Click on the link below to read my recap:
Participants ranked in order of relative performance:

$NET 55.49%
$DAL 33.51%
$RBLX 19.48%
$TSLA 4.65%
$MAR -3.52%
$SHOP -4.26%
$TTD -9.47%
$SE -13.43%
$RCL -20.37%
$APPS -20.83%
$CRWD -26.29%
$LUV -34.05%
$OKTA -34.35%
$PLTR -43.60%
$SQ -46.79%
$OZON -47.55%
$MELI -50.36%
$ROKU -54.90%
$OPEN -57.46%
$FVRR -62.34%
$ZM -64.89%
$LSPD -65.16%
$PINS -68.13%
$FTHM -74.17%
$TDOC -74.68%
$FSLY -77.09%
$SKLZ -80.82%
$NNOX -82.93%
$BFLY -85.43%
$JMIA -91.13%
$ATY -92.15%
$PTON -96.40%
$OTRK -111.73%
post media
$JETS - not taking off as we hoped!
What the aviation industry went through last year was unprecedented. This has been longest and strongest shock to the airline industry.

Previous shocks saw RPK (revenue per kilometer) decrease between -5% and -20% and recovery between 6-18months. This shock saw an initial decrease of -90% and we’re still at -60%, 19 months from the start.

Mid last year I did a spreadsheet based on public information, on which countries / airlines were getting a bail out. 13 out of 45 airlines got some sort of support. There were few more announcements after that.

Since the start of the Pandemic, globally airlines have received $243B in financial aid.

While stop-gap solutions were put in place for many, the overall support was much lower than what was needed.

So the Airlines turned to the Debt Capital markets. Globally, by the of 2020 airlines raised $125B in debt from the capital markets and an additional ~$100B through Government Aid.

Cash burn
The median cash balances for airlines was estimated to last 8.5months based on H2, 2020 cash burn rates. As of mid-2020, the airline industry was forecasted to burn $50B in cash. Based on forecasts in April 2021, cash burn rate is set to decrease to $10B by end-2021. However, this forecast was before the Delta Variant and I would estimate this to increase, possibly double by the end this year.

Recovery was slow last year but once the vaccine was announced, stock prices started to pick up. But, prices have hardly gone anywhere really and the industry is still struggling. Over 30 airlines globally have gone into administration or bankruptcy.

I’ve marked up the 1 year chart for $JETS below, showing the major events.

What’s next?

  1. International travel is picking up. But, ticket prices will be significantly higher because global air travel capacity has decreased due to bankruptcies.
  2. Recovery will be uneven. Many parts of the world are still not safe for travel
  3. Airlines plan to grow back to 2019 level but now, with a lower cost base
  4. More airlines are looking for fuel efficiency because of the losses endured the pandemic
  5. Jet Fuel costs are expected to rise in 2023. While many airlines hedge their fuel prices, a sustained rise in fuel costs will also affect their hedges.
  6. The consensus is that global travel will not be back to normal until well into 2023 and airlines will continue to see losses in 2022.

The bottom line:

Even with the global re-opening, easing travel restrictions and the pent up demand, we should expect a remarkable improvement in fundamentals for the airlines.

$LUV got downgraded by Goldman Sachs today from Buy to Neutral and a PT of $59 from $63, citing cost pressure, particularly from wages. I suspect we will see more of these, even if their not drastic downgrades.

It will be sometime before we see a full solid recovery.

(Source for Global Stats: IATA)
post media
love the chart annotations here. seems like a good time to average into airline positions
View 3 more comments
Featured earnings for the week of Oct 18
Earnings season (finally) getting into full gear!

So many interesting companies announcing earnings next week. Here are is the Fincredible Featured list. View all here.

Here are some I own / or particularly interested in

$JNJ - very interested to see results in the medical devices segment. Specifically are their signs of closing the gap with $ISRG with their new platform and are elective surgeries coming back

$ISRG - flip side of the $JNJ narrative. I love it when competitors announce close to each other :)

$NFLX - international subscriber numbers

$T - update on discovery spin-off, dividend and 5G capex

$XM - $MNTV is my top 3 holding based on thesis they are making inroads in enterprise market, which $XM dominates. Big enough market for both but want some context.

A few companies like $PG on inflation numbers, but I suspect @awallis will be kinda enough to provide a MacroTalk update on this topic again

post media
Alberto Wallis's avatar
$23.8m follower assets
Consumer Insights from the JPMorgan Chase Earnings Call
During today's JPMorgan Chase earnings call $JPM we got several interesting economic insights. Here are three quotes related to consumer spend that I found interesting:
  • Consumer health and supply chain issues: "There's not one company now that's not working aggressively to fix the supply chain issues. Sales are still up, credit card, debit card spend still up, consumers in great shape. And capitalism works. I doubt we'll be talking about supply chain stuff in a year."
  • Consumer spending: "Combined credit and debit spend was up 24% versus the third quarter of '19 and in line with last quarter." $V $MA
  • Travel spending: "Within that data, travel and entertainment spend was up 8% versus 3Q '19 and very closely track the patterns of the Delta variant within the quarter, softening in August and early September and reaccelerating in recent weeks.". $ABNB $DAL $AAL $LUV $MAR $CCL

Here's the link to the JPMorgan Chase earnings call in case you'd like to review it. Tomorrow several other major banks report earnings so hopefully, we'll get a lot more insights.
This isn’t too surprising given that a lot of people have been re evaluating what is important to them and have the disposable income to make changes happen.

what we need to think about as investors is during this re evaluation what are the commonalities and which companies will be involved resulting in increased earnings.

For example a lot of people decided to get a pet so will $WOOF or $CHWY see a bump? Did a lot of people re paint their houses (who is involved in that supply chain) is the home office just a phase and everyone now has to go back to the office? Will furniture companies keep bumping up or start to drag.
Add a comment…