5 Best Airline Stocks To Invest In Right Now

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

Number of Hedge Fund Holders: 32

Alaska Air Group, Inc. (NYSE: ALK) is a Washington-based company that provides passenger and cargo air transport. It is placed fourth on our list of 12 best airline stocks to invest in right now. The company was founded in 1932 and flies to more than 110 destinations around the world. In earnings results for the second quarter, posted on July 22, the firm reported earnings per share of -$0.30, beating market estimates by $0.15. The revenue over the period was $1.5 billion, up 263% year-on-year. 

On July 12, investment advisory Evercore maintained an Outperform rating on Alaska Air Group, Inc. (NYSE: ALK) stock and raised the price target to $30 from $25, identifying the firm as one of the top five picks in the airline sector. 

At the end of the first quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $587 million in Alaska Air Group, Inc. (NYSE: ALK), down from 35 the preceding quarter worth $552 million.

In its Q1 2021 investor letter, White Brook Capital, an asset management firm, highlighted a few stocks and Alaska Air Group, Inc. (NYSE: ALK) was one of them. Here is what the fund said:

“Despite initiating a position in the fourth quarter, Alaska Airlines Group, Inc (ALK) was sold during the first quarter. The Alaska Airlines investment was envisioned to be a long-term investment, but the stock price appreciated more quickly than expected. Like many other “re-open trades”, the value of the company including its debt now exceeds the value pre-pandemic. For that to be reasonable I’d have to believe:

1) The company/industry had too little debt and by adding debt they’ve better optimized their balance sheet for equity returns while still maintaining downside resiliency;

2) The company/industry’s profitability will be better moving forward than it was pre-pandemic and therefore warrant a higher multiple; and/or

3) The company/industry was significantly mispriced before the pandemic.

The first was true of Alaska Airlines pre-pandemic, but the certainty one can have about the second and third is not high enough to compel continued investment at today’s prices. The intended long-term position turned into a short-term trade with an exceptional IRR.”