Tuesday, December 31, 2013

Don't Buy Alaska Air for a Delta Buyout


At the end of last week, Alaska Air Group, (NYSE: ALK  ) jumped on speculation that Delta Air Lines (NYSE: DAL  ) was interested in buying the airline. Investors should not buy the stock based on these rumors; instead, the shares of Alaska are attractive based on the company's strong fundamentals and value proposition.

While the stock popped due to the actions of typical momentum investors jumping in and hoping for a quick buck, the long-term investor should ignore the hype. After the regulatory issues surrounding the American Airlines Group merger, it appears highly unlikely that the regulators would allow another merger involving the three major legacy airlines consolidating the industry.

Read the full article here.


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