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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: reno4 who wrote (44045)	8/23/2011 11:21:38 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78476

reno4 - I have looked at airline stocks somewhat. I sort of tracked LCC a bit since they don't hedge fuel, which means that they immediately benefit if fuel prices go down, as they are doing now. Both UAL and LCC trade at very low EBITDA/EV multiples (~3x) so they are cheap by that measure, but of course most of the cash flow (if trhey generate enough) will go towards upgrading their aging fleet (I think UAL is actually worse in that respect than LCC). Both UAL and LCC trade sort of like options, with the expiration date being the next bankruptcy. ALK may be the better pick, they have very little net debt, trades at a 2.6 EBITDA/EV and does not have to deal with unions, I believe.