Sunday, January 18, 2015

"Airline stocks have had a tremendous run. That all happened before the price of Oil dropped by 50%. I like the tail winds that are pushing Delta Airlines, (DAL), forward".

Dow Jones Industrial Average 17,737.37 (Down) Week Ending 01-09-2015
Dow Jones Industrial Average 17,512.00 (Down) Week Ending 01-16-2015


Well we begin 2015 once again in turbulent waters in the stock market. Your decision making on picking and holding stocks will be challenged each day with wild volatility. So you will need to know the reason you are buying a stock and why you need to remain committed to it, even though all around you the media will be telling you that it all is going to come crashing down. So stick with your fundamentals and rules that you have set for your stock picks, and hold firm.


One on my top stock picks for 2015 is
Delta Airlines Inc.(Symbol DAL, $45.84). Delta meets my base criteria with a PEG Ratio of 0.19 and a Return on Equity of 80.10%. It says the PE ratio is 3.99 but going forward it is more like 10. You are going to hear that December revenues for 2014 were down just like American Airlines, but pay no mind to it. They don't mention that Delta is now competing with Alaska Airlines in the Seattle market, a battle they will win. Below is a map of the routes they run. Their hub is the Hartsfield–Jackson Atlanta International Airport which is the busiest airport in North America. (Dubai and Heathrow are the world's busiest).

 I have heard one estimate that Delta will save $3 Billion dollars in cost savings if oil stays down where it is now in price. I think that they will save a good part of that with oil settling awhile in the Fifties range. 

 The company did Revenues last year of $39.79 Billion dollars and produced Net Income of $9.85 Billion dollars. They operate at a Gross Margin of 46.4%.

Earnings per share for 2014 were $3.34 per share and for 2015 it is projected at $4.88 per share.The 3 Year earnings growth for the company has been 41%. 


I have seen analysts ratings of 14 Buy -2 Outperform and 2 hold. Also 9 Strong Buy-1 Buy -and 1 Hold on "The Street.com", which is a very good source of data for your own scrutiny and analysis.

The company currently has an IBD earnings rating of 63 and pays out a dividend at the rate of 0.80% , better than a bank account.

So how has the stock done? Year to Date it is down (-6.81%), so you are buying it at a slight discount. The one year change for the trailing 12 months, (TTM) it is up 45.16%. The 3 year Total Return is a gigantic 417.87%. Again, that all took place before the price of oil dropped down.

 Hartsfield–Jackson Atlanta International Airport 
 So I am recommending that you purchase Delta stock , (DAL) and I believe the stock will end the year in the $60-$65 dollar range.

 "Stay true to your beliefs and your ideas shall guide you through."

Freewilly



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