Show the airlines some LUV, earnings contrarian play
Southwest airlines LUV earnings surprise this morning. Forecast was -$2.35, but it wound up being -$1.99, which is a step in the right direction. Because the market is a leading indicator, don't be surprised if LUV shares are up today. Ok so you may ask yourself, when is the right time to get back into this sector? Well, nobody knows, but my thesis here will be based on price to book value compared to other competitors in the airline industry. Book value is calculated as the difference between a company's total assets and total liabilities.
Delta Air Lines's pb Ratio is 5.98
pb Ratio of JetBlue Airways is 0.81
pb Ratio of United Airlines 1.48
American Airlines pb Ratio -$6.23
Southwest Airlines pb Ratio 2.17
As you may have heard, unless you're living under a rock on a deserted island, today is the day for a decision on covid stimulus negotiations. I think that since LUV pb Ratio at 2.17 is a fair entry point. And it also gives you a head start in case there is positive news on a stimulus deal. On the flip side, I don't expect LUV to have much downside from this price point of 40ish since it's already been beat up so much since March / April lows. Good luck and happy trading friends...
Delta Air Lines's pb Ratio is 5.98
pb Ratio of JetBlue Airways is 0.81
pb Ratio of United Airlines 1.48
American Airlines pb Ratio -$6.23
Southwest Airlines pb Ratio 2.17
As you may have heard, unless you're living under a rock on a deserted island, today is the day for a decision on covid stimulus negotiations. I think that since LUV pb Ratio at 2.17 is a fair entry point. And it also gives you a head start in case there is positive news on a stimulus deal. On the flip side, I don't expect LUV to have much downside from this price point of 40ish since it's already been beat up so much since March / April lows. Good luck and happy trading friends...
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Informacje i publikacje przygotowane przez TradingView lub jego użytkowników, prezentowane na tej stronie, nie stanowią rekomendacji ani porad handlowych, inwestycyjnych i finansowych i nie powinny być w ten sposób traktowane ani wykorzystywane. Więcej informacji na ten temat znajdziesz w naszym Regulaminie.