Norman Levine
AMR Corporation
AMR-N
DON'T BUY
Nov 29, 2011
Has gone under. The 100th airline to go bankrupt since 1990. Airline industry in its lifetime has never made money. Would not touch any of them. Occasionally when an airline goes bankrupt a judge throws something to the shareholders.
AMR operates 19 mines in the US Virginias, where the coal produced is used for steel production. Despite challenges within the economy, management believes production will finish on the higher end of guidance. The company is building cash reserves, while aggressively buying back shares and retiring debt. It trades at 6x earnings, 1.6x book and supports a 28% ROE. We recommend setting a stop-loss at $140, looking to achieve $264 -- upside of 28%. Yield 0.5%
(Analysts’ price target is $332.00)
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