Steady Return Stock - AMR

Bankruptcy of numerous airline companies have people wondering if the once high flying industry has come to a dead end. Moreover skyrocketting fuel cost has just made turnaround for the hard beaten airlines a lot harder. Despite the difficult time, there are still winners such as the Fort Worth, Texas based AMR Corp.(AMR) which owns American Airlines. While many airline companies have either gone south or went for Chapter 11 protection for the past year, the trans North America connetion service provider actually tripple its stock price from below $10 per share in January of 2005 to almost $30 per share this year. Based on the technical and financial chart the investors should feel pretty safe about the stock for some time as the stock fit the criteria of a steady return stock:

Technical
The 52 weeks chart shows this is a steady return stocks according to the followings:

• first of all since the beginning of last August the 200 day moving average have been rising steadily. Although 50 day moving average turned south in September and October, it went up again since. This is the first sign of a steady return stock.
• secondly throughout the year both 50 day and 200 day moving average have been staying pretty close together. This is another indication of a steady stock.
• thirdly the stock for the past 52 weeks has stayed relatively close to the 50 day moving average. Although the stock dropped quite a bit in June of this year, it went up again and is now back to 50 day moving average. This confirms this is a steady stock from the technical point of view.

Financial
The financial statement shows steady increase in revenue from $17 billion in 2003, 18 billion in 2004 to 20 billion in 2005. Although net loss increased a little bit from $761 million in 2004 to $861 million in 2005, it was still far less than net loss of $1.2 billion in 2003.

Steady Return Stock Rating(1 ~ 5, 5 means highest):
1. Market Potential(Airline): 3
2. Technical: 4
3. Financial: 4
Overall Rating: B