Delta Air Lines, Inc. (DAL), Travelers Companies Inc (TRV), Coach, Inc. (COH): Three Stocks I’m Buying After Tuesday’s Earnings

Page 1 of 2

In this article I am separating the good from the bad, not in terms of stock performance, but rather fundamentals compared to valuation following earnings. This is one of the best times of the year to capitalize on value, and in this piece I am looking at three stocks that are presenting large upside.

Delta Air Lines, Inc. (NYSE:DAL),Best Q1 in More than a Decade

As the price of fuel has declined, shares of Delta Air Lines, Inc. (NYSE:DAL) have traded higher, and on Tuesday, speculation of strong fundamental performance was made valid. The company reported what it called, “its best Q1 in over a decade,” as revenue was in-line with expectations and its bottom line exceeded expectations by more than 35%. The company did see lower capacity on regional flights, yet reported a 4.1% gain in revenue per mile to indicate that further upside is present.

There are several points that I find highly encouraging about Delta Air Lines, Inc. (NYSE:DAL)’s quarter, with one being its operating cash-flow of $1.10 billion! This is a company that saw significant operational improvements, despite a loss in capacity.

When you break down its revenue by region you can really see this difference, as revenue growth outperformed capacity by a minimum two-to-one ratio in six different categories (as seen here). Furthermore, despite its large gains, this is still a stock that is very cheap, trading at just 5.50 times next year’s earnings and a price/sales ratio of 0.35. Both ratios are far below the S&P 500 average, and because of its improvements, I say “Buy” this stock!

A Good Long-Term Investment

Travelers Companies Inc (NYSE:TRV) closed on Tuesday with gains of 2.09% and is now trading at $86.35. In my opinion, it’s a stock trading with about a 15% discount to the market, with a forward P/E ratio of 11.40 and a price/sales of 1.24. It is a zero growth company, yet despite zero growth, the stock is cheap compared to current fundamentals, and it’s improving in other fundamental areas of the business. For example, the company achieved 11% income growth, despite a 1% loss in revenue, indicating a massive gain in margins.

Travelers Companies Inc (NYSE:TRV) is a large company, and it’s not an investment that will return massive gains from this point forward. However, because it’s cheap with improved fundamentals, it would make a good long-term dividend investment. When you incorporate its large buyback program and its 9% dividend hike, then I believe Travelers Companies Inc (NYSE:TRV) is a safe low beta large cap stock that could add to a nicely diversified portfolio.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!