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Air travel is a focal point for drama: reunions are joyous and departures are sad. Unfortunately the airline industry is also a magnet for drama that endures vicious price-based competition, spectacular bankruptcies, exposure to fuel price spikes and low returns.

Contrarian investors might be tempted to consider United Continental Holdings (NYSE:UAL), because it is trading at a low price-to-earnings ratio and a low price-to-sales ratio (trailing twelve months). Instead, contrarians would be better served by screening for cheaper stocks that are higher quality.

As alternatives to UAL, consider the following stocks with solid credit scores:

Ticker

Company

Industry

10-Year Average ROE

Altman Z-score

(NASDAQ:ANDE)

The Andersons, Inc.

Farm Products

14.0%

4.6

(NYSE:BG)

Bunge Limited

Farm Products

14.7%

3.5

(NASDAQ:EDS)

Exceed Company Ltd.

Apparel

10.7%

4.4

(NASDAQ:IMKTA)

Ingles Markets Inc.

Grocery Stores

10.5%

3.0

(NYSE:KR)

The Kroger Co.

Grocery Stores

18.4%

4.9

(NASDAQ:NAFC)

Nash Finch Co.

Food Wholesale

8.5%

5.6

(NASDAQ:PCCC)

PC Connection, Inc.

Catalog & Mail Order Houses

5.0%

6.7

(NYSE:RSH)

RadioShack Corp.

Electronics Stores

28.2%

4.3

(NYSE:SNX)

SYNNEX Corp.

Business Services

13.2%

5.5

(NASDAQ:TESS)

TESSCO Technologies

Electronics Wholesale

9.5%

5.6

(UAL)

United Continental Holdings

Major Airlines

-5.6%

1.0

Unlike UAL, these alternative stocks are all categorized as "safe" according to the Altman Z-score,* indicating that they are not considered bankruptcy risks. Moreover, the average 10-year return on equity demonstrates that The Andersons (ANDE), Bunge (BG), Exceed Company (EDS), Ingles Markets (IMKTA), Kroger (KR), Nash Finch (NAFC), PC Connection (PCCC), RadioShack (RSH), SYNNEX (SNX), and TESSCO (TESS), have grown shareholder wealth at a faster rate than UAL. It is clear from these two metrics that each of these nine alternative stocks is as high or higher "quality" than UAL. Investors, unlike travelers, are safer on the ground.

What's more, these 10 stocks are cheaper, and have better growth prospects than UAL:

Ticker

P/E

P/S

P/B

EPS growth past 5 years

EPS growth next 5 years

ANDE

8.18

0.18

1.55

15.5%

12.0%

BG

9.19

0.15

0.72

27.0%

10.0%

EDS

1.89

0.18

0.38

0.0%

6.0%

IMKTA

11.28

0.12

1.02

-1.7%

13.3%

KR

12.33

0.15

2.79

5.8%

10.3%

NAFC

8.59

0.07

0.88

5.3%

15.0%

PCCC

9.82

0.13

0.98

37.0%

12.5%

RSH

7.46

0.17

0.92

-1.5%

6.2%

SNX

9.3

0.13

1.19

20.5%

10.0%

TESS

9.96

0.21

1.54

19.0%

15.0%

UAL

13.28

0.22

3.57

-59.1%

3.5%

Based on lower price multiples, these stocks are cheaper than UAL at current market prices. Better yet, they have better growth prospects according to analyst projections. Thus UAL's price would have to drop significantly to be competitive with these stocks because, at current valuations, they are simply better deals.

The bottom line is that UAL is not the only contrarian bet out there, and it is not the most attractive contrarian bet either. Rather than subject yourself to the turbulence of UAL, consider a diversified mix of these 10 securities as a more attractive, smoother alternative.

*Please read the article disclaimer for this article and Altman z-score calculations.

Source: 10 Stocks To Fly Higher Than United Continental