AAL - when to sell

Dedalus1

I pumped in some money to American Airlines believing it to be undervalued about 6 months ago. Investment had risen to almost 40% last week and has now dropped a bit lower.

I'd originally bought the stock just on the belief it'd be a slow climb to a 100% return - maybe a couple of years. I'm now beginning to question that and am wondering if I should sell on Monday for a c.35% gain?

I'm never really very good at exit strategies...

Ixlandia

I guess the answer lies with yourself in terms of your investing staregy - short, medium or long term. I see that you have it now for 6 months so you're in it medium - long term? If so I would hold. The worlds airlines are pretty much on their knees right now due to covid, the strongest will survive and American Airlines are a big name, they would have a decent chance of survival. I see their share price is holding relatively good over the past year. Their market valuation is $12.6 billion, although revenue dropped nearly $9 billion on 2019.

If you're in it short term, take your slice monday morning and sell. Nothing wrong with that. Otherwise, hold as travel will take off again later this year all going well.

garrettod

What's their cash position like?

Have they sufficient cash to cover likely cash burn, for another 12 months

If the answer is yes, then I would hold for another year, as I think the industry will be starting to benefit from significant increases in bookings, at that stage.