The airline industry has rebounded significantly since it’s 2009 lows. We expect these gains to continue and in fact are bullish on the airline industry overall. There are currently five airline stocks we like and recommend you should buy as they all look to be strong going forward and expect we these five stocks to lead the way.
Allegiant Travel (ALGT) runs a passenger airlines geared to leisure travel and currently flies to 64 smaller cities across the U.S. that major airlines tend to ignore. It’s the same strategy that Wal-Mart originally implemented, concentrating on markets that other retailers ignored. Over the course of the past five years earnings have grown at a rate of 38%, an impressive number when you factor that most of the industry is losing money. Look for ALGT to surprise everyone with upbeat earnings and investor outlook sending the stock price higher.
Boeing (BA) this aerospace and defense company has soared 40%+ the past year. Don’t expect this trend to stop anytime soon as pegged against its PEG ratio the stock is relatively cheap. With huge contracts on the way, strong book, and excellent cash flow all bodes well for Boeing expect it to rise to $95.
Delta Air Lines (DAL) provide air transportation for both passengers and cargo. Despite it’s shaky history the stock has successful exited bankruptcy and become relevant once again. The stock is relatively cheap compared to the rest of the sector making it a good potential investment.
Southwest Airlines (LUV) is a proven winner, year in and year out. They are the leading discount airline across the U.S. and have been a revenue machine which has translated to strong overall stock performance. While analysts expect this trend to continue there is one potential downside to watch out for. Southwest’s success historically has been the result of a fuel hedging strategy. It was a great idea when fuel price was originally skyrocketing, but now that prices are stabilizing and getting cheaper it may result in an overpayment which is something to watch out for. Nevertheless LUV is a great company top to bottom.
UAL Corp (UAL) owns United Air Lines. This stock to has emerged again after enduring a bankruptcy restructuring. The stock has soared recently though expect this trend to continue as projected earnings ratio is very favorable.