Book value per share!
Airlines, cruise lines, and oil companies have been getting hammered since the onset of the pandemic. SAVE, AAL, and DAL all look like solid value plays that will rebound in 2021 with the eventual release of a COVID-19 vaccine and subsequent positive public sentiment. All three of these airlines have hit 52 week-lows and are at historically low levels (5 years), minimizing downside risk. From a quick value analysis of the SAVE, AAL, and DAL quarterly 10Q and 10K reports, the underlying assets of each company are selling for virtually nothing. Take the most recent 10Q of SAVE for example (https://www.sec.gov/ix doc=/Archives/edgar/data/1498710/000149871020000210/save-20200930.htm):
Total Assets-Total Liabilities= $7,260,591,000.
Shares outstanding (97,678,265 common stock) x current price of SAVE ($17.70)=$1,728,905,290.
As a business, SAVE is selling below intrinsic value, and with a price to book ratio below 1, looks like an incredible bargain play for 2021. A long-term option play (LEAPS) vertical call spread OTM (buy the $20 call, sell the $25 put) may generate favorable returns if you have the stomach for options. If not, buy the stock after election week. |
