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Coronavirus Beaten Down Stocks/Funds Series - U.S. Global Jets ETF

Jun. 08, 2020 7:50 AM ETU.S. Global Jets ETF (JETS)AAL, DAL, LUV, UAL4 Comments


  • The US Global Jets ETF is at an all-time low, down 63% from its peak and 58% YTD.
  • The airline industry has been smashed due to COVID-19. Most airlines are just surviving with limited flights. Government support is helping.
  • The US Global Jets ETF is mostly a recovery play on the US airlines sector. It is currently trading with a PE of -1.85 and a dividend yield of 2.92%.
  • I do much more than just articles at Trend Investing: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

This article first appeared on Trend Investing on May 7, 2020; therefore all data is as of that date.

In this 'coronavirus beaten down stocks/funds' series of articles, I look at both stocks and funds that have been beaten down due to the COVID-19 (coronavirus) market sell-off and are near or below their 5-year low, are very well valued, and have potential to rebound strongly as we recover.

Today I look at the US Global Jets ETF (NYSEARCA:JETS). Due to COVID-19, the US and global airline industry has been devastated. In many cases, airlines have been shut down, or reduced to running essential/emergency services to bring home expats, etc. Reports in April suggest that US airline travel is down 95% and US travel demand is down 95% YoY. This has led to massive job losses, jobs on hold, and perhaps some airline bankruptcies.

However, USD 25 billion of US government support until end September 2020 for US airlines, as well as COVID-19 restrictions easing, should help the airlines start to recover later this year. Many will still suffer significant losses in 2020 despite government bailouts and will likely build up their debt burden.

For investors it will be safer to play the sector via a fund than an individual airline stock; but remember the massive fall in the sector may take some time to recover and there will likely be casualties along the way.

US Global Jets ETF (JETS) - Price = USD 12.71

As shown on the charts below, the JETS ETF is bouncing along the bottom near the all-time low. The fund is down 63% from its peak and down 58% YTD. The fund began in April 2015 at ~USD 25 per share.

US Global Jets ETF

US Global Jets ETF 5 year price chart

Source: Bloomberg

Source: Yahoo Finance

A look at the airlines/aviation

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Analyst’s Disclosure: I am/we are long JETS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information in this article is general in nature and should not be relied upon as personal financial advice.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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