Guru Jeremy Grantham (Trades, Portfolio) increased his stake in JetBlue Airways Corp. (JBLU, Financial) by 2,587,600 shares during the first quarter at an average price of $21.15. The purchase had a 0.21% impact on Grantham’s current portfolio.
JetBlue Airways was incorporated in Delaware in August 1998. The company began its business operations in February 2000. JetBlue Airways is the fifth largest passenger carrier in the U.S. after United Airlines, Southwest Airlines, Delta Airlines and American Airlines based on available seat miles. JetBlue Airways has served 30 million passengers and it currently averages 900 daily flights daily.
JetBlue Airways has a market cap of $5.83 billion, a P/E ratio of 8.33, an enterprise value of $5.87 billion and a P/S ratio of 0.95.
JetBlue Airways has multiple good signs that could have potentially influenced Grantham's decision to increase his stake during the first quarter.
- JetBlue Airways has been able to successfully expand its operations globally during its 16 years of conducting its business. According to GuruFocus, JetBlue Airways has a 9/10 profitability and growth rating with a 20.16% operating margin, ranking the company above 89% of the 76 companies in the Global Airlines industry.
- The company's Piotroski F-Score is 9, which indicates that the company is in a healthy situation.
- JetBlue Airways is currently trading at a one-year low in price at $18.09.
- The company currently has a P/E ratio of 8.33, which is close to its 10-year low of 8.21. Legendary investor John Neff claimed that he would look to invest in companies with low PE ratios as one of his most important mental models for fundamental long-term value investing.
- The company's EPS growth rate over the previous three years was 74.10%. This ranks JetBlue Airways above 89% of the companies in the Global Airlines industry.
Below is a Peter Lynch Fair value chart that shows JetBlue Airways is undervalued.
In conclusion
JetBlue Airways is a an established airlines company that currently ranks as the fifth largest passenger carrier in the U.S. The company has a low P/E ratio, a strong Piotroski score, and it is currently trading at a one-year low in price. Grantham increased his stake in JetBlue Airways at an average price of $21.15. Since he increased his stake by 4393.21%, the company share price has dropped 14%. Now could be a good time to purchase shares of JetBlue Airlines.
Grantham is the chairman and co-founder of the investment firm Grantham, Mayo, Van Otterloo & Co. LLC, which is a company based in Boston. The firm was founded in 1977.Â
GMO currently owns 576 stocks with a total valuation of $26.752 million.
Cheers to your investment success.
Disclaimer: Author does not currently own any shares of this stock.
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