Predictably, airline stocks struggled last week. The winter that has gripped much of the nation produced more havoc last week, resulting in cancelled flights and other chaos. Investors used the weather as an excuse to lock in profits for what has been one of the best industries to own in the last year plus.
I’d use the weakness as a reason to buy shares at current prices. The airline industry is a money-maker with or without weather-related delays. When this weather passes, the money printing will continue. Analysts expect American Airlines (AAL) to grow profits by 59% in 2014. You can buy that growth for just 7 times 2014 estimated earnings. Buy, buy and buy some more.
Written by Jamie Dlugosch