Airline stocks set to soar?

No.. they are not set to soar. Several of them have risen since 9/11 so I wouldn't use that as a benchmark. Also, I do a lot of trading and just because a stock has gone down in the past doesn't mean it will rise in the future. I would be looking at other stocks/industries that are in a much better situation to soar. If you want a few stock picks... My top 3 holdins and three I highly recommend are...

Intel - INTC = they are hitting on all cylinders and are eating AMD for lunch. Look for this stock to run from $24 to the $30's very soon. Honestly, with their forward PE next year, $40 is very possible.

BNCN - Bank of North Carolina = small regional back in NC but has great earnings, pays a divedend, in a fast growing area of the country, and is a HUGE takeover target for someone like SunTrust, Wachovia, Bank of American or even Wells Fargo to buy them out. Currently trading at $17.79... if bought out... it would be well over $25 a share based on book value alone.

Haliburton - HAL = this stock is similar to INTC in terms of they are doing a lot of things right and crushing their competitors. Oil is still high (close to $70 barrel) which means HAL's services will stay in demand. They report earnings on 7/23 so that will tell more but I think it will be a good conference call and could put HAL over $40 a share easily.

Again, these are just my 3 favorites.... I honestly though would stay away from the airlines for now. It doesn't mean they will be ideal later on but for at least the next two quarters... I'm investing in other stocks.
Good luck!
 
It depends what airline... and even then, it's very tricky. Delta is trading at a forward PE (20) similar to Southwest, while US Airways and AMR are in the mid single digits forward PE. Then again, AMR and US Airways especially face future labor struggles, and AMR needs to begin a huge capital investment phasing out the S80's. If I was going to invest in airlines (which I never do, although I made a killing buying puts on LCC when it was at 45) I'd look at GOL Airlines (ticker symbol GOL). They recently tookover most of Varig's operations, and combined with their own, are poised to take advantage of the huge booming Latin American market.

As for HAL, if you want another great oil services company that doesn't rip off the American taxpayer and soldiers in Iraq, check out XTO.
 
You must log in or register to reply here.
Back
Top