Airline Stocks?
May 7, 2020 | 7:59 pm
#1
Original Poster
Join Date: Oct 2019
Location: PDX, OGG or between the two
Programs: AS Gold
Posts: 3,226
Airline Stocks?
Mods - I wasn't sure where to put this so feel free to move to a more appropriate place, if needed.
Looks like many airline stocks have slowed or stopped the freefall and most are at about 50% of 52-week highs. Anyone else thinking it might be a good time to jump in? I don't go too nuts with individual stocks but will sometimes play around a bit (basically, the money I'm saving by Vegas being closed
). I'm 47 and am still investing very much for the long term and have to think airline travel will eventually rebound. If not, everything else I could/will invest in will be screwed too.
I went for "JETS" which is bought like a stock but is kind of a mutual fund of all the major airlines. I put some additional money into Southwest (stock symbol "LUV"). So, am I crazy?
Looks like many airline stocks have slowed or stopped the freefall and most are at about 50% of 52-week highs. Anyone else thinking it might be a good time to jump in? I don't go too nuts with individual stocks but will sometimes play around a bit (basically, the money I'm saving by Vegas being closed
). I'm 47 and am still investing very much for the long term and have to think airline travel will eventually rebound. If not, everything else I could/will invest in will be screwed too.I went for "JETS" which is bought like a stock but is kind of a mutual fund of all the major airlines. I put some additional money into Southwest (stock symbol "LUV"). So, am I crazy?
May 7, 2020 | 8:25 pm
#2
FlyerTalk Evangelist
Join Date: Mar 2013
Programs: DL PM, MR Titanium/LTP, Hilton Diamond
Posts: 10,319
In my opinion there are other opportunities with more upside.
To think that any airline is going to get anywhere near their 52 high in the next 18-24 months is wishful thinking. I do think there is some upside (I have a small amount of DL stock I bought at $19) but by an large there are other industries I see recovering more quickly.
If going after the travel and leisure space, I'd rather be in hotels (REITs specifically since the hotel chains own few or no assets). Business travel drives the profit margins for the airline industry and business travel is going to be non-existent until 2021 (many F500s including the one I work for have communicated as much). Plus airline assets aren't that liquid (if all airlines are in trouble, who is buying the slot rights or the airplanes). Plus airlines need to figure out the social distancing thing and how they are going to address it.
Hotels on the other hand can be accessed in a world where borders are still closed but restrictions are eased for travel within the country -- people with cabin fever can get in a car and drive. As long as they adhere to their stated cleaning goals, the social distancing aspect is largely irrelevant (apart from a buffet breakfast which requires some thought). Plus the actual land owned by some of the REITs is a more liquid asset that can be sold if needed. Personally I got into PK when it was at $6 (now at $8.16 has bounced up to $10 on a couple days). They were spun out of Hilton a couple years ago and hold a number of valuable and centrally located Hilton properties in major US cities.
To think that any airline is going to get anywhere near their 52 high in the next 18-24 months is wishful thinking. I do think there is some upside (I have a small amount of DL stock I bought at $19) but by an large there are other industries I see recovering more quickly.
If going after the travel and leisure space, I'd rather be in hotels (REITs specifically since the hotel chains own few or no assets). Business travel drives the profit margins for the airline industry and business travel is going to be non-existent until 2021 (many F500s including the one I work for have communicated as much). Plus airline assets aren't that liquid (if all airlines are in trouble, who is buying the slot rights or the airplanes). Plus airlines need to figure out the social distancing thing and how they are going to address it.
Hotels on the other hand can be accessed in a world where borders are still closed but restrictions are eased for travel within the country -- people with cabin fever can get in a car and drive. As long as they adhere to their stated cleaning goals, the social distancing aspect is largely irrelevant (apart from a buffet breakfast which requires some thought). Plus the actual land owned by some of the REITs is a more liquid asset that can be sold if needed. Personally I got into PK when it was at $6 (now at $8.16 has bounced up to $10 on a couple days). They were spun out of Hilton a couple years ago and hold a number of valuable and centrally located Hilton properties in major US cities.