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ValuEngine.com Rates Airline Stocks by One-Year Forecast Returns

|Includes: American Airlines Group (AAL), JBLU, LTM, LUV, RYAAY
Good News and Bad News

ValuEngine.com Rates Airline Stocks by One-Year Forecast Returns

Markets are down today on a variety of bad economic news. In addition, oil prices are down big after a decision to release 60 million barrels of crude from strategic reserves--30 million of which will come from the US--in order to deal with the ongoing crises in the Middle East and the resultant disruptions in supply. This moves undercuts OPEC's refusal to increase production a few weeks ago.

 

Some stocks rallied on this news and none were better positioned to profit from lower oil prices than those in the fuel-dependent Transportation Sector. Over the past few years, we have seen a roller coaster ride for Airline Industry stocks as they have dealt with both recession and wild swings in fuel costs. Those prescient enough to lay on some fuel hedging strategies--such as Southwest--were recently challenged as their initial moves expired and they began to deal with the vagaries of the market once more.
 

So, it should be no surprise that today's drop in oil prices lead to a rally for the airlines in the midst of broader carnage Lower fuel costs combined with the various "revenue enhancements"--baggage fees, cancellation fees, food fees, etc--and better route/capacity management on the part of most carriers over the past few years should further boost the bottom line for airlines. 


 

One of the most powerful features of ValuEngine is the ability to screen our universe of more than 5500 stocks with a huge variety of criteria. Using both our website and our Institutional software package (VEI), subscribers may design their own screens to identify investment targets. For today's bulletin, we queried our software package using some liquidity criteria and then asked it only to provide results from the Airline Industry. Below, we present the top five airline stocks ranked by One-Year Forecast projections.



 

Ticker

Name

Mkt Price

Valuation (%)

VE Rating

Last 12-M Retn(%)

Forecast 1-Month Retn(%)

Forecast 1-Yr Retn(%)

P/E Ratio

AMR

AMR CORP

5.75

-44.56

5

-27.4

2.9

25.46

N/A

LFL

LAN CHILE-ADR

27.44

8.59

4

45.26

1.5

8.89

21.93

LUV

SOUTHWEST AIR

11.02

-25.74

4

-7

1.84

5.16

15.88

RYAAY

RYANAIR HLDGS

29.79

-10.71

4

18.73

1.92

5.12

15.95

JBLU

JETBLUE AIRWAYS

6.07

-16.9

3

1.42

1.21

3.06

19.52

 

MARKET OVERVIEW

Summary of VE Stock Universe

Stocks Undervalued

56.64%

Stocks Overvalued

43.36%

Stocks Undervalued by 20%

24.83%

Stocks Overvalued by 20%

15.53%

 

 SECTOR OVERVIEW

 

Sector

Change

MTD

YTD

Valuation

Last 12-MReturn

P/E Ratio

Aerospace

-0.13%

0.29%

11.75%

0.06% undervalued

28.53%

18.39

Auto-Tires-Trucks

0.38%

-1.20%

-10.95%

6.09% undervalued

43.74%

18.87

Basic Materials

0.00%

-4.17%

-8.63%

8.25% undervalued

42.97%

34.35

Business Services

-0.71%

-2.55%

5.59%

0.93% undervalued

16.55%

26.89

Computer and Technology

-0.49%

-5.01%

3.10%

5.01% undervalued

28.91%

36.97

Construction

-0.29%

-6.47%

-11.39%

7.63% undervalued

2.41%

28.33

Consumer Discretionary

-0.96%

-3.67%

-0.32%

2.87% undervalued

22.07%

30.98

Consumer Staples

0.19%

-2.81%

-7.80%

0.33% overvalued

15.26%

31.47

Finance

-0.65%

-2.03%

-0.32%

3.30% undervalued

9.44%

27.54

Industrial Products

-0.20%

-0.34%

-0.23%

5.73% undervalued

29.34%

28.23

Medical

-0.73%

-4.63%

9.84%

4.79% undervalued

17.85%

29.69

Multi-Sector Conglomerates

-0.55%

-1.98%

-0.28%

19.16% overvalued

29.06%

25.2

Oils-Energy

0.41%

-5.08%

-3.75%

17.54% overvalued

35.67%

54.9

Retail-Wholesale

-0.77%

-1.83%

3.02%

1.36% undervalued

26.42%

34

Transportation

-0.53%

-3.10%

-6.78%

3.68% overvalued

16.83%

20.43

Utilities

-0.63%

-2.11%

2.92%

4.07% overvalued

22.48%

23.4