Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, American Airlines parent AMR
With that in mind, let's take a closer look at AMR's business and see what CAPS investors are saying about the stock right now.
AMR facts
| Headquarters (Founded) | Fort Worth, Texas (1934) |
| Market Cap | $2.19 billion |
| Industry | Airlines |
| Trailing-12-Month Revenue | $22.17 billion |
| Management | Chairman/CEO Gerard Arpey CFO Isabella Goren |
| Return on Capital (Average, Past 3 Years) | (1.9%) |
| Cash / Debt | $4.56 billion / $11.29 billion |
| Competitors |
Delta Air Lines Southwest Airlines United Continental Holdings |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 37% of the 936 members who have rated AMR believe the stock will underperform the S&P 500 going forward. These bears include capsncrunch and tbbiang.
Just last month, capsncrunch warned Fools about climbing aboard AMR: "Of all the big airlines, [American] is one of the worst customer experiences. Couple this with their recent falling out with Orbitz and Expedia and I cannot imagine any scenario in which they don't take a beating this year."
In fact, AMR's three-year average return on capital was negative, at (1.9%). That's even lower than airline rivals Delta at 3.5%, Southwest's 4%, and United Continental's 2.5%.
CAPS member tbbiang elaborates on the bear case:
At best, the four goal post strategy and British Airline/Iberia partnership is weak. The predicted $500 million in additional revenue from these meager ideas will not be enough to off-set predicted fuel increases for 2011. Now let's throw-in three major union contracts, all more than three years past their amendable dates, excessive debt, weak stewardship and the best one could hope for is survival. Will the anchor of 'doing the right thing' by not seeking bankruptcy, as most all competitors did, sink what was once a premier airline? We shall see.
What do you think about AMR, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
