Investment Thesis – Buy, Sell, Hold Why?Company Description Business Segments,Metrics – Mkt Cap, Div. Yield, Volume,
Industry Analysis – Company Analysis, Qualitative – Management, Porter’s 5 Forces, Risks, Quantitative – DCF, Comps, DDM, RIM, Risks,and,Technicals, Ratio Analysis, as well as other relevant analysis.
Initial questions (10-K, 10-Q, & Analysts’ Reports)
What does the company do? Business model? Competitive edge? Recent news stories?
Risk Factors? Resource supply/costs? Legislation/regulation? Market for product?
M&A? Threats? Opportunities? Major investments? Joint ventures?
Management? Old? Tenured? Specialized? Difficult to replace? Succession plan?
Question everything, be contrarian?
Absolute value, based on future cash flows
Absolute value, greater value up front
Sum of the parts valuation, LBO and M&A, Options-based, Dividend Discount Method
P/E is important (but not only consideration) Price / (Earnings / Total Shares)
Both trailing (prior 12 months) and forward (projected earnings) are important
How does P/E look historically?
This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.Company profile
Delta Air Lines, Inc also known simply as “Delta” specializes in air transportation for passengers and cargo particularly in the United States but also around the world. The Company’s extensive network allows it to maintain a presence in both international and domestic markets. Delta serves nearly 165 million customers each year. Current market capitalization is $28,573.11 million. This year, Delta was awarded the 2014 “Carrier of the Year” by Air Transport World magazine, marking the first time in a decade that a North American-based carrier has earned the distinction. (Delta newsroom, February 2014) With an industry-leading global network, Delta carriers provide service to 322 destinations in 59 nations on all populated continents. Delta’s headquarters are in Atlanta. The company employs 80,000 people and it has 700 airplanes. Delta has created many strong partnerships and marketing relationships with foreign airlines in order to gain a foothold in foreign markets. Delta Airlines is widely known to be one of the founders of Sky Team alliance. It actively contributes in the industry’s principal trans-Atlantic joint project alongside Alitalia and Air France-KLM while also participating in a newly formed joint venture with Virgin Atlantic. (Delta newsroom, February 2014) If we include Delta’s alliance partners, the company delivers more than 15,000 flights per day while it tries to focus on main cities in US as well as Europe and Asia. Delta has invested billions of dollars in order to add to the customer experience in key segments such as technology, air port facilities, and global products. Delta airlines actively participate in social media such as Twitter, Google+ and Facebook.
I. Between 2000 and 2004 the company began to change its engine structure from triple engine jets to double engine jets in order to reduce fuel costs. With the exception of the Boeing 747, now Delta solely uses twin jet engines.
II. To avoid bankruptcy in 2004 Delta initiated restructuration called “The Clock Work Operation” which added new flights from Atlanta and reduced the workforce. Additionally, in January 2005 Delta closed its hub within Dallas Airport. Also in 2005 the company sold its subsidiary Atlantic Southeast Airlines to SkyWest for 425 million dollars. All these actions were in vain because in September 2005 Delta had to declare bankruptcy with over $20 billion in debts...