5 Best Airline Stocks to Buy for 2021

Below we presented the list of 5 best best airline stocks to buy for 2021. For a detailed discussion and a more comprehensive list see the 10 Best Airline Stocks to Buy for 2021.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best airline stocks to buy:

5. Alaska Air Group, Inc. (NYSE: ALK)

Alaska is in a much better position to stave off the coronavirus turbulence, mainly because of its limited exposure to business travel and solid balance sheet. The company’s cash burn rate is much narrower than its competitors. For example, in September, it burned $117 million, easily beating its own estimates of $150 million.

The company is currently in the news after it agreed to buy several Boeing 737 Max planes. This is the first order of a U.S. career after the Federal Aviation Administration lifted its grounding order following two deadly crashes of Max jetliners.

The stock is down over 24% year to date.

Smart money sentiment indicates that hedge funds became bullish on Alaska in the third quarter, as 34 out of 816 funds owned the airline’s stocks, up from 29 funds in the second quarter. Ric Dillon’s Diamond Hill Capital is the biggest shareholder of Alaska in our database, with 2,132,938 shares of the company, worth over $78.13 million. Confluence Investment Management said the following about the stock in its Q1 letter:

“We also took a partial position in Alaska Air due to its strong franchise value in the airline industry. Alaska is the fifth largest domestic airline and has a reputation for great client service, particularly on the West Coast where it has a near-fanatical following. The company has one of the strongest balance sheets in the industry with only $550 million of net debt versus $4.3 billion of book equity. The COVID-19 outbreak has upended the airline industry and we’ve refrained from taking a full position in Alaska Air. As always, we will continue to monitor the investment and make changes as we deem prudent.”