Delta is just off of an extreme level of valuation as it backs down to $43.36 today, May 22, 2015.
If you look at the Total Revenue chart, you can see that revenue gains were steady and have increased by 42% since 5 years ago in May. Over the same time frame, however, the stock price has risen by 267%. After-tax margins went from losses to profits and margins briefly climbed over 20% (after-tax).
Next questions: Did DAL use up all of their tax-loss carry forwards? Will the drop in oil prices lead consumers to spend more on travel? Will people fly on vacations more or will driving still be the best choice.
DAL has been a monster winner for any portfolio up until now, but Airlines are a cyclical business and the business cycle hasn't been outlawed. Consolidation and efficiencies have driven up profitability, and shareholders have been richly rewarded. It looks like there are more "shareholders" than "share-buyers" at this level and the recent price action is alerting us to sellers unloading shares. $46 seems to be the common price where the sellers are unloading shares and the strong buyers are down at $34-$30. So, from $43.30 here, the upside seems less than the risk to the downside.
Here's hoping you look at the fundamentals too when you examine a chart and not just the "technimentals"....
Cheers,
Tim 5/22/2015 2:02 PM EST 43.31 last DAL
PS - Note - I have been picking a top in DAL over the past year +. Check out my charts.
Great chart Tim.
Have an excellent weekend!