10 Worst Airline Stocks To Buy According to Short Sellers

4. Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY)

Short Interest as % of Shares Outstanding: 9.52%

Number of Hedge Fund Holders: 13

Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY) is an air carrier company that has been navigating the complex landscape of air travel with a business model that emphasizes both passenger services and cargo operations.

Operating primarily in the U.S. and expanding into Latin America, the company has a fleet of 43 passenger aircraft and 12 freighters, supporting a network of nearly 107 routes across 107 airports. It caters to various markets, including leisure travelers, cargo clients, and military services.

Sun Country (NASDAQ:SNCY) is one of the worst airline stocks according to short sellers. The airline is currently facing challenges, particularly due to overcapacity in the domestic market, which has placed pressure on unit revenues.

In the second quarter, it reported a total revenue of $254 million, a decrease of 2.6% compared to the same period in 2023. The fare per scheduled passenger fell by 20.1%, which is evidence of the tough pricing environment.

Despite the headwinds, the company has managed to maintain its focus on cost control, with total operating expenses growing at a slower pace than its total block hours. The effort has contributed to a decline in adjusted cost per available seat mile (CASM) by 4.9% year over year.

Additionally, Sun Country (NASDAQ:SNCY) has reason for optimism, as it has posted eight consecutive profitable quarters, with a GAAP earnings per share of $0.03 and an adjusted EPS of $0.06 in Q2.

CEO Jude Bricker attributed the success to the company’s unique and diversified revenue model, which stands in contrast to many of its low-cost competitors during these challenging times.

A significant development in this regard is the recent amendment to its agreement with Amazon, which extends its partnership through 2030 and introduces the operation of up to eight additional Boeing 737-800 cargo aircraft by early 2025. The expansion could increase Sun Country’s (NASDAQ:SNCY) cargo fleet from 12 to as many as 20 freighters, which can provide a substantial boost to its revenue streams.