Forget the Mega-Merger: Invest in Alaska Air Group, Inc. (ALK) Today

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To top off the attractive income statement and cash flows, Alaska Air has a beautiful balance sheet — especially for an asset-heavy business. The company has more than $1.3 billion in cash and short-term investments and just under $4 billion in total liabilities. For comparison, JetBlue Airways Corporation (NASDAQ:JBLU) has about $1.5 billion in cash and more than $5.2 billion in liabilities.

Forecast says growth for cheap
According to a recent Barron’s article, Alaska Air is headed for double-digit earnings growth this year –13%, to be exact. Capacity is on the rise while the company continues to be a preferential airline among West Coast travelers (especially between the mainland U.S., Canada, and Alaska).

In the airline world, you pay up big time for a better flying experience. You even pay to eat peanuts and drink 5 ounces of soda (let’s be real — I always get a Bloody Mary). Perhaps that makes it especially refreshing that Alaska Air Group’s shares trade at just 8 times one-year forward earnings. That makes it substantially cheaper than Allegiant at 12.3, cheaper than JetBlue at 8.34, and cheaper than Spirit‘s 10.08. There are few things sweeter than to find a class-leading, niche-focused company with an effective management team doing what they do best, all selling for less than the competition.

Let the rest of the world focus on the soon-to-be biggest airline in the world. It may prove to be a valuable move for shareholders (and probably more expensive for travelers), but how much more valuable? I’ll gladly take 13% growth at 8 times earnings over route supremacy any day.

The article Forget the Mega-Merger: Invest in This Airline Today originally appeared on Fool.com and is written by Michael B. Lewis.

Fool contributor Michael B. Lewis and The Motley Fool have no position in any of the stocks mentioned.

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