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Steve Hach
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Steve Hach is the Senior Editor at ValuEngine.com, a Newtown, Pennsylvania-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 7000 US, Japanese, and Canadian, and other foreign stocks. Hach utilizes... More
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  • US Air (LCC,$LCC) Makes Move 0 comments
    Aug 23, 2012 3:04 PM | about stocks: AAL

    US Air (LCC,$LCC) Makes Move

    US Airways Group, Inc. (US Airways Group) is a holding company whose primary business activity is the operation of a network air carrier through its wholly owned subsidiaries, US Airways, Piedmont Airlines, Inc. (Piedmont), PSA Airlines, Inc. (NYSE:PSA), Material Services Company, Inc. (NYSEARCA:MSC) and Airways Assurance Limited (NASDAQ:AAL). MSC and AAL operate in support of the Company's airline subsidiaries in areas, such as the procurement of aviation fuel and insurance. It has hubs in Charlotte, Philadelphia and Phoenix and a focus city in Washington, D.C. at Ronald Reagan Washington National Airport (Washington National). During the year ended December 31, 2011, it offered scheduled passenger service on more than 3,100 flights daily to more than 200 communities in the United States, Canada, Mexico, Europe, the Middle East, the Caribbean, and Central and South America. It also has an East Coast route network, including the US Airways Shuttle service.

    Our proprietary valuation and forecast models have been favoring airline stocks in the Transportation Sector recently. US Air is the latest pick for both our VE View and VE Forecast 16 MNS newsletter. Since we rebalanced for the month, the stock is up more than 17%. Analysts like the stock lately due to a round of rate increases which seem to have stuck.

    ValuEngine has issued a BUY recommendation for US AIRWAYS GRP on Aug. 22, 2012. Based on the information we have gathered and our resulting research, we feel that US AIRWAYS GRP has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE P/E ratio, momentum and price/sales ratio.

    Based on available data as of Aug. 22, 2012, we believe that LCC should be trading at $13.25. This makes LCC 13.83% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For LCC, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $2.34, forecasted EPS for the next four quarters of $3.46, and correlations to the 30- year Treasury bond yield of 2.91%.

     

     

    ValuEngine Forecast

       
     

    Target Price

    Expected Return

    1-Month

    11.65

    1.98%

    3-Month

    11.85

    3.75%

    6-Month

    12.15

    6.43%

    1-Year

    12.34

    8.04%

    2-Year

    12.44

    8.97%

    3-Year

    11.27

    -1.31%

     

    Valuation & Rankings

         

    Valuation

    13.83% undervalued

    Valuation Rank

    65

    1-M Forecast Return

    1.98%

    1-M Forecast Return Rank

    99

    12-M Return

    122.18%

    Momentum Rank

    98

    Sharpe Ratio

    -0.2

    Sharpe Ratio Rank

    45

    5-Y Avg Annual Return

    -19.94%

    5-Y Avg Annual Rtn Rank

    30

    Volatility

    100.81%

    Volatility Rank

    12

    Expected EPS Growth

    47.94%

    EPS Growth Rank

    73

    Market Cap (billions)

    1.85

    Size Rank

    79

    Trailing P/E Ratio

    4.89

    Trailing P/E Rank

    98

    Forward P/E Ratio

    3.3

    Forward P/E Ratio Rank

    99

    PEG Ratio

    0.1

    PEG Ratio Rank

    98

    Price/Sales

    0.14

    Price/Sales Rank

    92

    Market/Book

    3.63

    Market/Book Rank

    25

    Beta

    0.98

    Beta Rank

    58

    Alpha

    0.97

    Alpha Rank

    98

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: AAL
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