In this article we discuss the 5 best airline stocks to invest in right now. If you want to read our detailed analysis of these stocks, go directly to the 12 Best Airline Stocks To Invest In Right Now.
5. JetBlue Airways Corporation (NASDAQ: JBLU)
Number of Hedge Fund Holders: 29
JetBlue Airways Corporation (NASDAQ: JBLU) is ranked fifth on our list of 12 best airline stocks to invest in right now. The company provides air passenger transport services and is based in New York. It operates a fleet of 267 aircraft that travel to 98 destinations, mostly in the Americas. On July 27, the firm posted earnings for the second quarter, reporting earnings per share of -$0.65, beating estimates by $0.09. The revenue over the period was $1.5 billion, up 587% year-on-year and beating estimates by $60 million.
On July 28, investment advisory Susquehanna kept a Positive rating on JetBlue Airways Corporation (NASDAQ: JBLU) stock but lowered the price target to $21 from $24, noting that there would be near-term pressure on the firm but long-term outlook seemed positive.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in JetBlue Airways Corporation (NASDAQ: JBLU) with 3.3 million shares worth more than $69 million.
4. Alaska Air Group, Inc. (NYSE: ALK)
Number of Hedge Fund Holders: 32
Alaska Air Group, Inc. (NYSE: ALK) is a Washington-based company that provides passenger and cargo air transport. It is placed fourth on our list of 12 best airline stocks to invest in right now. The company was founded in 1932 and flies to more than 110 destinations around the world. In earnings results for the second quarter, posted on July 22, the firm reported earnings per share of -$0.30, beating market estimates by $0.15. The revenue over the period was $1.5 billion, up 263% year-on-year.
On July 12, investment advisory Evercore maintained an Outperform rating on Alaska Air Group, Inc. (NYSE: ALK) stock and raised the price target to $30 from $25, identifying the firm as one of the top five picks in the airline sector.
At the end of the first quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $587 million in Alaska Air Group, Inc. (NYSE: ALK), down from 35 the preceding quarter worth $552 million.
In its Q1 2021 investor letter, White Brook Capital, an asset management firm, highlighted a few stocks and Alaska Air Group, Inc. (NYSE: ALK) was one of them. Here is what the fund said:
“Despite initiating a position in the fourth quarter, Alaska Airlines Group, Inc (ALK) was sold during the first quarter. The Alaska Airlines investment was envisioned to be a long-term investment, but the stock price appreciated more quickly than expected. Like many other “re-open trades”, the value of the company including its debt now exceeds the value pre-pandemic. For that to be reasonable I’d have to believe:
1) The company/industry had too little debt and by adding debt they’ve better optimized their balance sheet for equity returns while still maintaining downside resiliency;
2) The company/industry’s profitability will be better moving forward than it was pre-pandemic and therefore warrant a higher multiple; and/or
3) The company/industry was significantly mispriced before the pandemic.
The first was true of Alaska Airlines pre-pandemic, but the certainty one can have about the second and third is not high enough to compel continued investment at today’s prices. The intended long-term position turned into a short-term trade with an exceptional IRR.”
3. SkyWest, Inc. (NASDAQ: SKYW)
Number of Hedge Fund Holders: 33
SkyWest, Inc. (NASDAQ: SKYW) is ranked third on our list of 12 best airline stocks to invest in right now. The company provides airline services and is based in Utah. On July 29, the company posted earnings for the second quarter, reporting earnings per share of $1.22, beating market predictions by $1. The revenue over the period was more than $656 million, up 87% compared to the revenue over the same period last year and beating market predictions by more than $57 million.
In April, investment advisory Raymond James reiterated a Strong Buy rating on SkyWest, Inc. (NASDAQ: SKYW) stock and raised the price target to $66 from $56, underlining that the firm would use balance sheet strength in the near term to drive growth.
At the end of the first quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $765 million in SkyWest, Inc. (NASDAQ: SKYW), down from 41 the preceding quarter worth $763 million.
2. Delta Air Lines, Inc. (NYSE: DAL)
Number of Hedge Fund Holders: 50
Delta Air Lines, Inc. (NYSE: DAL) is a Georgia-based airline firm. It was founded in 1924 and is placed second on our list of 12 best airline stocks to invest in right now. It owns and operates a fleet of 1,110 aircraft. In earnings results for the second quarter, posted on July 14, the firm reported earnings per share of -$1.07, beating market estimates by $0.30. The revenue over the period was more than $7 billion, up 385% compared to the revenue over the same period last year and beating estimates by $850 million.
On July 15, investment advisory Raymond James upgraded Delta Air Lines, Inc. (NYSE: DAL) stock to Strong Buy from Market Perform with a price target of $58, noting that the expectations around the firm had been reset.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Delta Air Lines, Inc. (NYSE: DAL) with 4 million shares worth more than $195 million.
In its Q2 2020 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Delta Air Lines, Inc. (NYSE: DAL) was one of them. Here is what the fund said:
“Delta Air Lines Inc. (DAL) declined -1.38% over the period after the initial hit to the stock in 1Q following the outbreak of the COVID-19 pandemic. The company reported 1Q results with EPS of -$0.51, in-line with consensus. The company guided for June revenue to be down 90% YoY and announced another $1B cut to capital expenditures (CAPEX) for a total cut of $3B so far this year. The company ended the quarter with $6B in liquidity and they expect to end the June quarter with $10B in liquidity. Delta held its annual shareholders’ meeting where it noted that it expects to finish the 2nd quarter with over $15B in liquidity with a daily cash burn of $30M getting to breakeven by the end of the year.”
1. Southwest Airlines Co. (NYSE: LUV)
Number of Hedge Fund Holders: 52
Southwest Airlines Co. (NYSE: LUV) is ranked first on our list of 12 best airline stocks to invest in right now. The company is based in Texas and markets passenger airline services. It has a fleet of 718 aircraft that travel to 107 destinations around the world. The firm posted earnings for the second quarter on July 22, reporting a revenue of over $4 billion, up 297% compared to the revenue over the same period last year and beating market predictions by $70 million. The company has a market cap of over $30 billion.
On July 26, investment advisory Jefferies maintained a Buy rating on Southwest Airlines Co. (NYSE: LUV) stock but lowered the price target to $65 from $75, noting the lower 2023 cash flow forecast for the firm. On August 11, Redburn started covering LUV stock with a Buy rating.
At the end of the fourth quarter of 2020, 52 hedge funds in the database of Insider Monkey held stakes worth $747 million in Southwest Airlines Co. (NYSE: LUV), down from 55 in the preceding quarter worth $757 million.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Southwest Airlines Co. (NYSE: LUV) was one of them. Here is what the fund said:
“One of our goals as we constantly monitor the portfolio is to see if we can better deploy capital by lowering the probability of being wrong. This motivation drove our swap of Delta Airlines into Southwest Airlines during the quarter. We expect a huge rebound in airline traffic as COVID-19 concerns abate, but we are much more comfortable that it will be led by leisure travel. Conversely, we are more uncertain of the ultimate level and timing of business travel demand. Southwest, with its simple fare strategy and high leisure travel exposure, is better positioned to capture the ongoing traffic rebound without having to answer the business travel demand question on which Delta is more dependent. As a result, we expect Southwest to play serious offense as it gains share in the rebounding travel market and can fully leverage the massive pent-up demand for travel that we expect. In addition, the U.S. lead in vaccination over Europe favors Southwest over Delta, given the domestic focus of Southwest. COVID-19 has changed many things, but humans by their very nature like to move, and many of them will do it on Southwest.”
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