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James Li
James Li
Articles (1439)  | Author's Website |

4 Airport and Airline Stocks to Consider on Coronavirus Vaccine Hopes

Stocks with high profitability and modest undervaluation based on GF Value

As investors cheer on positive news of a coronavirus vaccine, four airport services and airline stocks that have high profitability, good five-year revenue growth and are modestly undervalued based on the GF Value are Spirit Airlines Inc. (NYSE:SAVE), Fraport AG (XTER:FRA), Atlas Air Worldwide Holdings Inc. (NASDAQ:AAWW) and Malaysia Airports Holdings Bhd (XKLS:5014) according to the All-in-One Screener, a Premium feature of GuruFocus.

Markets surge on vaccine hopes, airline stocks stage liftoff

The Dow Jones Industrial Average rocketed to a new record intraday high of 29,933.83, up over 1,600 points from last Friday's close of 28,323.40 on Pfizer Inc. (NYSE:PFE) and BioNTech SE's (NASDAQ:BNTX) announcement that its Covid-19 candidate vaccine prevented, with an over 90% effective rate, the virus in trial participants.

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Stocks of major U.S. airline companies like American Airlines Inc. (NASDAQ:AAL), United Airlines Holdings Inc. (UAL), Delta Air Lines Inc. (DAL) and Southwest Airlines Co. (NYSE:LUV) soared over 10% on the vaccine news.

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As such, investors may find opportunities in the stocks of airport service and airline companies that have a GuruFocus profitability rank of at least 7, a five-year revenue growth rate of at least 5% and are modestly undervalued based on the GF Valuation measure. GuruFocus' own valuation method considers a company's historical price multiples and adds internal adjustments based on a company's past performance and future earnings growth.

Spirit

Shares of Spirit traded around $21.51, showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.87.

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GuruFocus ranks Spirit's profitability 8 out of 10 on the back of three-year revenue growth rates near a 10-year high of 19.3% and outperforming 87.34% of global competitors.

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Gurus with large holdings in Spirit include PRIMECAP Management (Trades, Portfolio) and Hotchkis & Wiley.

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Fraport

Shares of Fraport traded around 41.37 euros ($48.88), showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.80.

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The German airport services company operates aviation, retail, real estate, ground handling and international services at Frankfurt Airport. GuruFocus ranks the company's profitability 7 out of 10, driven by a three-year revenue growth rate that is near a 10-year high of 12.70% and outperforms 76.54% of global competitors.

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Atlas Air Worldwide

Shares of Atlas Air Worldwide traded around $52.69, showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.86.

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The Purchase, New York-based company provides outsourced aircraft and aviation operating services. GuruFocus ranks the company's profitability 7 out of 10 on the back of operating margins and three-year revenue growth rates outperforming over 70% of global competitors.

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Gurus with large holdings in Atlas Air Worldwide include David Einhorn (Trades, Portfolio)'s Greenlight Capital Re Ltd. (NASDAQ:GLRE) and Donald Smith & Co.

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Malaysia Airports Holdings

Shares of Malaysia Airports Holdings traded around 4.33 Malaysian ringgit ($1.05), showing that the stock is modestly undervalued with a price-to-GF Value ratio of 0.83.

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Malaysia Airports operates and manages airports primarily in Southeast Asia. GuruFocus ranks the company's profitability 8 out of 10 on several positive investing signs, which include expanding operating margins, a 3.5-star business predictability rank and three-year revenue and earnings growth rates that outperform over 77% of global competitors.

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Disclosure: Long Southwest Airlines.

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About the author:

James Li
I am an editorial researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

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