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Alaska Air Group, Inc. (ALK), JetBlue Airways Corporation (JBLU): Prepare to Benefit From a Sell-Off in the Airlines

The falloff of JetBlue Airways Corporation (NASDAQ:JBLU)’s share price should be viewed as a temporary lull, and the shares remain a solid long-term holding for more risk-tolerant investors. Its lofty debt-to-equity ratio could limit its means to expand to some degree. The stock is trading at a forward P/E ratio of 8.7x based on 2013 share net of $0.52.

SkyWest, Inc. (NASDAQ:SKYW) stock descends, though earnings exceed expectations

SkyWest, Inc. (NASDAQ:SKYW) provides regional service through agreements with major airlines, as well as holding two passenger airlines and an airline leasing company. Metrics such as passenger miles and load factors are climbing, while unit costs are running substantially lower thanks largely to reduced maintenance outlays.

The company’s revenue base (excluding engine and overhaul reimbursements) will probably continue to expand as it rolls out service according to its agreement with American Airlines, likely soon to merge with US Airways Group Inc (NYSE:LCC). Its share-earnings are on track to grow considerably this year.

SkyWest, Inc. (NASDAQ:SKYW) shares sold off to a lesser extent than those of the previous two carriers discussed. It is not as susceptible to fuel price drops as the others, due to the reimbursement of that cost by the parent entities. I believe the shares have greater earnings stability, however less price upside than the others. It is, nevertheless, a good selection at the current quote. Their forward P/E ratio is 9.4 based on 2013 share profits of $1.26.

Fool’s advice

I continue to like JetBlue Airways Corporation (NASDAQ:JBLU)’s fleet and route expansion strategy to be a catalyst to the share price, and the shares look to have long-term upside. Alaska, too, is apt to benefit from its launching of service to additional destinations, albeit more leisure focused. Alaska Air Group’s stock holds appeal for most investors. Finally, SkyWest, Inc. (NASDAQ:SKYW) fills a growing niche in passenger air travel as well as regional flying between Midwest and Western cities, along with operating ExpressJet, a major regional carrier across the U.S. Its stock’s valuation has dipped somewhat, too, of late and the shares are a worthwhile long-term selection.

The article Prepare to Benefit From a Sell-Off in the Airlines originally appeared on Fool.com.

Damon Churchwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Damon is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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