This last week was extremely bearish for the Aviation Market. As earnings came out we noticed a slight slow down in new orders for aircraft. We see revenue weakening on earnings reports which is starting to show in the market.
This week on our watchlist of Aviation stocks only 3 had growth over the course of the last week. Let’s take a look at some of the companies that released earnings this last week and see what to expect for the week to come.
Down below will be a quick recap of the stock we traded last week. The percent value on the right next to the price is the weekly change for the stock.
Atlas Air (AAWW) -28.31%
Our biggest looser this week is Atlas Air! over the course of this week we saw their stock price drop over 28%! They reported missing their earnings per share by $0.39 on the last quarter. This really hurt the company over all and brought their stock to fall out of the sky on Aug 1st.
The options market for this company experienced extremely volatile week and for those who traded this stock toward the downside were able to pull in high returns on their investment.
The stock just pushed to new lows for the year so we need to watch to see how it reacts to the market changes this week after its poor earning reports. The possibility of this bearish trend is very possible with the selling sentiment being so strong. Although when we zoom and look to see the stock on a larger time frame we see major support level at the $32 price range.
Atlas will need to release news of some new contracts or changes in their organization to help support any moves up from this point.
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GOl airlines (gol) +0.89%
Gol Airlines had little change in price over the course of the week from start to end. Although if we look to see there was a lot of price action that took place in the middle of the week. price spike up above $22.50 and then after testing at the price level again for the next move it rejected and fell back down towards the $21.50 price.
We see stronger selling volume in the order books which may signal to a weakening stock price.
Their earnings were very strong with EPS sitting at $0.11 as compared to the forecasted $0.02 and their revenue surpassed their forecasted amount by $54 million. Although price saw some weakness on the end of the week my outlook for this stock is still optimistic.
Their management is supportive of their vision to grow and create new routes. They are experiences some issues with the grounding of the 737 MAX which is the greatest issue the company is currently experience.
As soon as revisions are made for the 737MAX and the aircraft is airborne again i would expect to see this stock continue to grow to new highs.
Curtiss-Wright (CW) -4.27%
Curtiss-Wright had an earning report that was extremely close to their forecasted amount. Although EPS were above what was forecasted the revenue was $880,000 under what was forecasted which shows to have impacted the stock price towards a negative price.
Overall the stock is still in an uptrend. There is still positive cashflow for the company. The most important thing to look for is new potential contracts with the government.
As trump has announced withdrawal from the weapons treaty we can look to see Curtiss-Wright working to develop new techonology for the military. If they are succesfull in securing a contract for new technology expect to see price react in a positive manner potentially coming back to previous highs.
SKYWEST (SKYW) -3.76%
SkyWest beats its earning reports yet the stock also showed weakness this week. We can see a trend occurring where although earnings are being hit prices are weakening as many investors are beginning to worry of the overall outlook for the US market. Pre-Tax income was up 17$ to $115M and 6 new aircraft were introduced into their fleet.
The best metric for SkyWest is the improvement in their Load Factor. They experienced a growth in departures of 7.7% and the average passenger trip length increase by 1.6% this shows that more guest are choosing to fly with skywest airlines for greater period of time rsulting in greater revenue growth for the company.
Price has been testing around the $60 range for the last few weeks and has been struggling to be able to break this price level. Selling out of the money calls may be a potential strategy to be able to pull in some cash flow while the stock has little change in price.
Wesco Aircraft (wair) -4.15%
Wesco has yet to release their earnings report for Q3. They are schedule to release them Monday August 5th. Currently based of the Zack’s Consensus Estimate for the company, they are projecting a growth of 6.7% from the year-ago Quarter’s. The stock has been in an uptrend this year and looks to be gaining some strength.
Defense companies are expected to gain a boost from government spending in the upcoming weeks as tensions rises with Russia and North Korea. As we see more spending being allocated towards these resources it will help surge prices higher. The market closed last week with strong buying volume at the $10.4 price level.
After hours on Friday the stock experienced a slight pop in price. Look to see how price respects the current level to potentially move towards the upside if strength continues.
looking out for next week!
This is going to be a volatile week for U.S. Stocks after ending the week with news releases from our president and as tensions rise with various countries. As new tariffs get placed on China importations of various supplies and goods will be affecting U.S. companies.
Companies to Earnings reports to look out for this week are Air Transport Services (ATSG), Avianca holdings (AVH), Wesco Aircraft (WAIR), Mesa Air (MESA), Air T (AIRT), and last but not least UBER (UBER).
I know you may be thinking that Uber is a ride-sharing company but we like to see them more as a transportation industry disruptor. With their testing in Vertical Take off and landing Drone we are going to see how their stock price reacts to new releases in this technology.
I do want to stress that this website is just a documentation of my trading ideas analysis and opinions. I am not in anyway shape or form advising you to trade in any of these companies directly. I simply aim to share my thought process in aims of providing some clarity towards making sense of what is going on in the industry today.
Be cautious when trading options as there is a potential of you loosing your entire investment. Never risk more than you are willing to loose on any given trade. Consult your financial advisor for any legal advise prior to trading. If you are looking for professional education on trading strategies and market analysis click the link below for more info.