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How To Keep Your Portfolio Flying High

Jul. 19, 2013 11:50 AM ETLUV, JBLU, DAL
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Activist Stocks's Blog
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Airline stocks have historically been bound by moves in the oil markets; thus, as we see oil inventories rising, it could be time to take a look at the high-flying airline stocks, in part because airlines have historically traded inversely to oil, so falling oil prices are a big positive for airline stocks.

In the latest Energy Information Administration data, crude oil inventories rose 300,000, compared to the expected 400,000 decline. Oil has also seen a decline based on concerns that quantitative easing could be ending. Another big tailwind for the airline industry includes a rebounding economy, which should lead to higher travel. S&P reported that total revenue passenger miles was up 0.6% year-over-year in 2012 and the passenger load factor (utilization of airline capacity) was up 0.8 percentage points to 82.8%.

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