Out Fox The $treet

  American Airlines' stock is near yearly lows despite the airline returning to producing massive profits. Higher fuel prices are a concern for the market, but they don't significantly impact the airline's ability to generate substantial profits. The stock is far too cheap trading at only 4.5x EPS targets while industrial transport peers trade at 3x the PE multiple. Despite the airlines returning to massive profits over the last year,  American Airlines Group  ( NASDAQ: AAL ) is back to near yearly lows. One prime reason for the weakness is higher fuel prices constantly feared by the market for  no rational reason pushing the valuation far below industrial transport peers. My  investment thesis  remains ultra Bullish on the airline due to the cheap valuation from the irrational dip in the stock back below $14. Read the full article on Seeking Alpha.  Disclosure: Long AAL. Please read the disclaimer page for more details. 

Spirit Airlines is down close to 50% from recent highs. The airline will obtain a massive cushion from lower fuel costs with jet fuel down to $1.42 per gallon. Global air travel rarely slows down based on virus outbreaks. The stock is a bargain at below 5x normalized EPS estimates. As the global coronavirus outbreak reduces travel, the domestic airline stocks are being hit hard.  Spirit Airlines  ( SAVE ) is now an incredible bargain after taking a $20-plus tumble in the last couple of weeks. The market has far too much fear over an airline with a rock-solid position. Read the full article on Seeking Alpha.  Update March 9, 2020 Jet fuel was down to $1.31 as of March 6 and will continue to fall. The lower prices are a huge benefit to the airlines like Spirit. The stock has held the lows from last Friday.  Disclosure: No position. Please review the disclaimer page for more details. 

When reviewing the numbers of Delta Airlines ( NYSE: DAL     ) , you might be shocked that it's, well, an airline. The domestic airline with the largest market cap is starting to act like a real corporate citizen: paying down debt, paying a dividend, and actually buying back company stock. And amazingly, it's achieved this success despite stubbornly high oil prices. Just last year, Delta bought a refinery in an attempt to dramatically reduce the costs of jet fuel. What originally looked like a desperate, ill-conceived move has become almost an afterthought, with Delta and other airlines reporting strong profits despite the high price of fuel. Even bankrupt  AMR (NASDAQOTH: AAMRQ) and its prospective partner  US Airways ( NYSE: LCC     ) are generating huge gains, despite fuel costs and a merger blocked by the Department of Justice. Read the full article here . Disclosure: Long LCC. Please review the disclaimer page for more details....

While  Delta Air Lines ( DAL )  is set to become the world's 3rd largest airline when  U.S. Airways Corp. ( LCC )  and  AMR Corp ( AAMRQ.PK ) complete a merger later this year, the company could be set to profit the most from a slew of airlines mergers. In essence the domestic airlines market will become a three-headed monster with  United Continental Holdings ( UAL )  also competing for the top spot. Delta Airlines has already integrated a major merger with Northwest Airlines and stands to benefit from the other two market leaders struggling to complete the integrations of major mergers. United Airlines and Continental Airlines are still working through integration issues from a merger finalized already. In addition, Delta is working to finalize the purchase of Pinnacle Airlines out of bankruptcy. The deal has several plans that reduces costs and increases the focus on profitable routes which is refreshing for this industry. All of these mergers...