Why Small-Cap Airlines Could Yield Gains in 2011

The Penny Sleuth Features: Penny Stocks, Options and High-Growth Opportunities! Why Small-Cap Airlines Could Yield Gains in 2011 By Jonas Elmerraji February 24, 2011 Richard Branson, the founder of the multibillion-dollar Virgin Group, is attributed with saying that the best way to become a millionaire is to start off as a billionaire and buy an airline… Unfortunately for many airline investors, that piece of advice has held true for decades. Airlines are highly susceptible to rising commodity costs, the ebb and flow of consumer spending and even geopolitical risks. The string of bankruptcies, bargain-priced buyouts and outright failures that dot the industry’s history books should serve as a good warning to most investors by now. But there are exceptions to every rule: A well-placed investment in Delta Airlines in mid-2009 could have netted you 99.8% gains. Buying shares of Southwest Airlines at the same time would have provided profits of 110%. And taking on shares of AirTran even as the market collapsed in mid-2008 could have put 270% gains in your portfolio. To be sure, there are still significant challenges in the airline industry right now. While prescient investors could have generated some enviable returns by buying many airline stocks at historic discounts, few of those low valuations have withstood the rallies of 2009 and late 2010. Simply put, there are few sheer bargain opportunities left in the airline business. At the same time, crude oil is maintaining its newfound triple-digit price, and the recovery in consumer travel spending remains tentative. Urgent Profit Alert to Hit Your Inbox on Wednesday... Witness strategy that produced 97% success — 123 winners in 127 moves! Your profits could start as soon as Wednesday. All the details — right here. The Industry’s Diamonds in the Rough But ultimately, the fact remains that there are attractive opportunities even in the most challenging sectors. That’s exactly we’re taking a look at a few of the market’s smallest airline stocks right now… Republic Airways Holdings (NASDAQ: RJET): This small, regional airline is no stranger to outsized gains — its shares have already rallied more than 20% in the last year. Even if you’re not familiar with Republic’s brand, this carrier happens to operate regional routes for nearly every legacy airline in the U.S., and management has wisely invested in bargain-priced competitors like Midwest and Frontier. With profitability back in this airline, this could be a low priced stock worth watching in 2011. SkyWest, Inc. (NASDAQ: SKYW): While shares of SkyWest haven’t made much of a move lately, this stock has nonetheless shown shareholders marked improvement in its fundamentals — the airline’s profitability crushed expectations in yesterday’s earnings call. Allegiant Travel Company (NASDAQ: ALGT): For a bit of a change, investors might want to take a look at Allegiant Travel, an airline that supports the firm’s leisure travel package business. By focusing on connecting small cities with popular vacation destinations, Allegiant is able to capture a bigger chunk of travelers’ vacation dollars. That’s translated into a nearly double-digit net margin for shareholders. Even so, with shares on the heels of a 22% decline in the last year, even the most speculative investors will want to be careful with this play. Sincerely, Jonas Elmerraji P.S.: Just last week, I told Penny Stock Fortunes readers about another airline worth watching. I’ll admit, it’s my favorite play in the industry — and my analysis suggests that shares could rally 40% in 2011. To get the details on this stock, just click here… P.P.S.: Of course, if you’re more into short-term trading, I recently guided readers to 51% gains on a small, beleaguered airline stock using my exclusive STORM System. I reveal how it works here… Why Small-Cap Airlines Could Yield Gains in 2011 is featured at Penny Sleuth. The Secret $200 Retirement Blueprint Investing in Penny Stocks What Is Technical Trading Follow the Penny Sleuth on Twitter, here. Become a Facebook Fan of The Penny Sleuth, here. The Penny Sleuth, a free e-letter, offers independent news and commentary on small cap stocks, options and high growth opportunities. We sent this e-mail to KNUMASSCN@gmail.com because you or someone using your e-mail address subscribed to this service. Are you having trouble receiving your Penny Sleuth? You can ensure its arrival in your mailbox by: Whitelisting Penny Sleuth. To end your Penny Sleuth e-mail subscription, click: Unsubscribe. 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