JetBlue Airways Corporation (JBLU), Hawaiian Holdings, Inc. (HA), Delta Air Lines, Inc. (DAL): Fly High With These UnderValued Airline Stocks

The stock is comparatively risky compared to JetBlue Airways Corporation (NASDAQ:JBLU), as growth opportunities are limited due to its lower number of flights and operation in a particular demographic region. However, initiatives have been taken by the company, as it recently announced new flight launches between Honolulu and Beijing/Taipei. Altogether, the stock is a great buying opportunity. It is now trading cheap at $5 and the forward P/E ratio is four, indicating an increment in value in the coming months.

Founded in 1924, Delta Air Lines, Inc. (NYSE:DAL) has a fleet of 700 aircraft and operates in the U.S. and international locations. The on-arrival time rate of Delta Air Lines, Inc. (NYSE:DAL) is 85% and it has been recently named as the most admired airline for 2013.

Similar to JetBlue Airways Corporation (NASDAQ:JBLU) and Hawaiian Holdings, Inc. (NASDAQ:HA), the EPS forecast is high for Delta. It has given more than 50% return to investors since December 2012. The stock is currently trading at $15 and has the potential to go up further. This can be seen from the PEG ratio of 0.22, which is much lower than the industry average. Forward P/E till December 2014 is at $5, which indicates the degree to which the stock is undervalued.

Another positive point for the airline is the low debt and relatively high cash it is holding. Airlines, being capital intensive, usually carry high debt due to high equipment and maintenance cost. Delta Air Lines, Inc. (NYSE:DAL) can be considered safe in this regard.

Conclusion

The three airlines discussed above have reported increases in passenger traffic in their March 2013 reports. Besides, they have continued their impeccable services such as on-time delivery and in-flight passenger entertainment. Watch out for these stocks, some of them have their next earnings reports scheduled at the end of this month. If they report an impressive quarter, prices will definitely shoot up.

The article Fly High With These UnderValued Airline Stocks originally appeared on Fool.com and is written by Shas Dey.

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