SABR 50% Upside - 3-6 Months Horizon
Updated
Disclaimer: I/We are heavily invested in Sabre with some of our group have locked in profits and reinvested at below 14.5$ and has been averaging down. I have started buying 
SABR in the 12.5$ range and have now averaged around 12.2$.
Sabre has been one of those Airline / Tourism companies that are still down due to travel restrictions.
Why Sabre and not any famous airline that has been collecting Government stimulus cheques and loans at 0% Interest levels, I hear you ask?
The worst Airline was American Airlines
AAL still is 50% below its 2019 30
ISH recovery price, however, AAL is a business that had been called out for Bankruptcy at some point but was bailed out while the other airlines don't offer the same returns discussed here.
Sabre on the other hand comes with a Great Global Reopening Story and a Google Growth Hopes to carry forward,
We all have seen the fans this past week cheering the Football match in Copa America and Euro Cup in London showing that people are back travelling, however, countries with less progress with vaccines and/or policy screw-ups has hindered the Airline industry generally. British Passports for example being compared to Uzbekistan or something of that sort. We do not expect Sabre to pull great numbers this Q2 also as The Airlines + Tourism sector is spinning their heads just to understand policymakers guidance.
Actions that are not good on SABR recent insider trading activity is the President and CEO - MENKE SEAN E action Year to Date of Selling almost 5M worth of Stock.
This is a Tech Company with Airlines Valuations in my opinion and has been inking agreements and continuing partnerships with various airlines and tourism outlets to offer.
We believe the Google story may be overhyped however we believe the potential is very possible as this is a company with such large access to data and stretches its arms around the Airline and Tourism sector where both has been looking to evolve post covid.
I shall be updating this Idea for when significant impact up or down, feel free to Troll, disagree or agree RESPECTFULLY!
SABR in the 12.5$ range and have now averaged around 12.2$.Sabre has been one of those Airline / Tourism companies that are still down due to travel restrictions.
Why Sabre and not any famous airline that has been collecting Government stimulus cheques and loans at 0% Interest levels, I hear you ask?
The worst Airline was American Airlines
AAL still is 50% below its 2019 30ISH recovery price, however, AAL is a business that had been called out for Bankruptcy at some point but was bailed out while the other airlines don't offer the same returns discussed here.Sabre on the other hand comes with a Great Global Reopening Story and a Google Growth Hopes to carry forward,
We all have seen the fans this past week cheering the Football match in Copa America and Euro Cup in London showing that people are back travelling, however, countries with less progress with vaccines and/or policy screw-ups has hindered the Airline industry generally. British Passports for example being compared to Uzbekistan or something of that sort. We do not expect Sabre to pull great numbers this Q2 also as The Airlines + Tourism sector is spinning their heads just to understand policymakers guidance.
Actions that are not good on SABR recent insider trading activity is the President and CEO - MENKE SEAN E action Year to Date of Selling almost 5M worth of Stock.
This is a Tech Company with Airlines Valuations in my opinion and has been inking agreements and continuing partnerships with various airlines and tourism outlets to offer.
We believe the Google story may be overhyped however we believe the potential is very possible as this is a company with such large access to data and stretches its arms around the Airline and Tourism sector where both has been looking to evolve post covid.
I shall be updating this Idea for when significant impact up or down, feel free to Troll, disagree or agree RESPECTFULLY!
Note
It's one month now since I posted this Idea for an Entry!I stand today at an average price of 11.96$ and shall be increasing my position given these price levels while we are down over 11% on this entry.
Although SABR is a tech company, it has been highly correlated to the performance of Airlines more broadly and Tourism less likely, which is fairly the same on its income statement on its revenues.
We have seen much better than expected results on both Revenues and Earnings for Q2. We also roughly estimate Operating Cashflow to be better and around -680M$ in 2021 December compared to -773M$ in 2020.
2021 Operating Loss is only 28.5% better from 6 Months ended compared to the same period in 2020.
Although SABR managed to reschedule their debt on better terms lifting some covenants, that was still not good enough to get a bullish sentiment on the price level and it continued to decline post-earnings.
We remain confident in this stock and shall be adding to our position below 11$.
We maintain our outlook on a Strong Q3 and a Stronger Holiday Travel in Q4.
Note
Another Bad Week, We are Not cutting our losses at 10$ even after today's news about the 300M Offering.We remain confident with Sabre ability to be resilient with holiday seasons ahead in Q4. We would like to see better Oil prices coming from increased demand due to back to school back to office back to travel and tourism coming ahead which lifts the Airline's balance sheets to better valuations.
Sadly SABR is getting no love due to its most recent price action and lack of certainty in the travel markets. Initially, we had more people vocal about government subsidies for Airlines and Tourism covered by JP and Mnuchin last year. However, with more and more people vaccinated, we are down from 16 to less than 10$ today in pre-market.
We don't expect to drop further from here and shall be averaging down, with 9.85$ is the 61.8% Fib yet to be broken, we shall be looking to buy only below 10$ to average down.
Note
Watching the SPX has been painful with ATH every day of the week. We expect the SPX to slowly grind its way to 4800$ and stop there, or the Stimulus package may just blow it up to 5000$ in a spike!That being said we hear more people being vocal about SABR on CNBC and Airlines broadly are at better discounts relative to the market. We shall see a more positive sentiment now that the FDA has given a green light on Pfizer Dose and shall be expecting a quicker recovery in both Tourism and Travel supported by stable Oil prices above 60$.
We expect a quick return above 12$ and a consolidation of between 12.7$ - 11.5$. Our objective is to avoid a drop till November 4th Earnings which should take us above 15$ if Europe opens its door again and stop shooting itself in the leg with self-imposed restrictions.
Sadly we were unable to commit more capital to SABR when it dipped to 9$ and still are averaged at 11.965$ as we have taken a hit with BABA falling to 150$ and had decided to not increase risk appetite given the ATH in SPX which may trigger a Taper Shock in the markets. We remain Bullish on Sabre and wish that JP doesn't ruin our Weekends!
Note
Okay, Qatar Airways, Nice but its long term .....TSA numbers are around 1.7M Daily Throughputs today relative to 2.1M in 2019 for the same period.
We believe today is a great time to get in on SABR at this valuation and we cant tell you how SAD it makes us, to have not waited to get in on SABR as we had been suffering for 3 months now with no positive returns broadly on our portfolio with SABR and BABA being the biggest unrealized loss on our books.
We shall be looking for the start of a trend now with the holiday season on the doors soon.
Shall be looking to leverage up now as schools are back which shall push the reopening story and quicker adaption of the new normal.
Note
We had been writing Covered Calls on Sabre and looks like we got bit by the rally on Thursday and Friday. We are looking to re-enter below 12$ and hoping for a good few weeks ahead of Holiday season.US TSA Daily Travelers Throughputs, ~2.31M 2019 vs ~1.73M(-25%) in 2021. below 12$ should Yield north of 25% easy this year and continue to grow on the first half of next year.
Note
US TSA Daily Travelers averaged 1.86M(-22%) this week vs 2.4M in 2019. Over 50% of Sabre's Revenue is generated from US.Sabre should be trading around 15$ Today however it seems that investors are not excited enough even after multiple funds have raised their positions significantly in Sabre from recent filings.
Sabre is the largest position we hold since July 2021, till date with Stocks and 13$ Strike @ Jan 22 Call Options.
Note
Having traded this company for over 4 months consistently, We are confident that November shall give a true boost to the Upside, We are expecting a Green Holiday and a happy new year!US TSA figures are above its 2019 Low of 1.8 Million daily travelers while we are at 1.85 Million this week with a strong fundamentals approaching new year.
We expect a significant improvement in the short term for Sabre and would likely be amplified by the Google Story and the backing from Qatar Airways and Emirates ... if you haven't bought below 11$, you should as its trading now at long term lower lows support levels trend line with only 13$ showing a strong resistant from the Fibonacci confluences.
Note
Boy this has been a terrible trade so far however, it just seems like the bad part is over and the upcoming is only a brighter future from here.Note
Boy was I wrong again!, We are currently holding a large loss position relative to our risk appetite. This has exceeded our estimated worst case scenario, however we are in no position to exit at these levels and are hoping for a quick recovery in the upcoming 3 months ahead. We have heavily increased our position using 13$ Call options and are expecting to recover at a price of 11$ and exceed our profits estimates at the price of 13$ before the end of February 2022.This has been a devastating and frustrating trade since July as we had failed to adapt to changing conditions with COVID re-emerging with this Stock. We have given up most of the current Years profits and are still holding a loss on invested capital as of Today.
With all that is said, there are no more levels to break below the 7.8$ price as that was the 61.8 Fib Extension on the March 21 to date downtrend.
US TSA Daily Travelers Averaged 2.056M (-11.5%) Travelers this week relative to 2.3222M Travelers for the same period 2019. The Sharp Rise can be observed in the Chart below.
23rd Nov 2021 2.208M(-9.33%) Travelers vs 2.435M Travelers in 2019.
We are still Invested with 11$ Entry and had accumulated 13$ April 22 Calls at the average price of .47$
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