Sunday, May 21, 2017

It is hard as a Value investor to watch these wild moves in some of these Growth stocks. But one must stay the course and continue to look for compelling bargains. This week ALK fit the bill as wonderful Mid-Cap stock.

Dow Industrial Average 20,804.84  (Down) Week ending 05-19-2017
S & P 500 Index 2381.73  (Down)

Warren Buffett and Charlie Munger of Berkshire Hathaway bought up the stocks of many of the US airline carriers in late 2016, but they did not buy all of them. They like the 85% capacity utilization in the industry. It is a little difficult for competition to come in, because they are limited by the number of gates available at the various airports.

Alaska Air Group Inc. (Symbol ALK, $84.57) is one that they did not buy up. Analysts have a current target price on ALK of $110.00 per share. The stock has corrected a little bit here but has good numbers. PEG Ratio is 1.54. ROE is 25.50. (I saw ROE reported on IBD at 34.11%). The Price to Book Ratio is 3.46.

Alaska Airlines Group Inc., when it combined with Virgin Airlines, became the 5th largest US airline carrier and the premier USA west coast carrier known for its good customer service and low fairs.

ALK stock has been up 29.69% over one year (even with the recent correction). Earnings are year ago were $7.25 per share and this year is projected at $7.93 per share. 2018 Earnings are projected at $8.56 per share with a forward PE of 9.61. EPS for the last 5 years have been up an average of 31.5%.

ALK has a market capitalization of $10.45 Billion and had sales last year of $6.33 Billion. Sales quarter over quarter where up 29.80%. The IBD rating on the stock is 69 and B.  The company pays a dividend of 1.42% currently.

Alaska Airlines starting in 2018 is going to start 9 flights a day to a 2nd Airport in Seattle. 

  • "Alaska Airlines has been ranked #1 among the nine largest carriers in the United States by The Wall Street Journal for overall operational performance for three years in a row, while Virgin America has placed #2 in the same study for the past two years.
  • Virgin America had been voted “Best Domestic Airline” in both Travel + Leisure’s Annual World’s Best Awards and Conde Nast Traveler’s Readers’ Choice Awards for the past eight consecutive years.  
  • Alaska Airlines has been ranked “Highest in Customer Satisfaction Among Traditional Carriers” by J.D. Power for eight years running, and has been ranked #1 for on-time performance six years in a row by FlightStats."


I have just recently purchased this stock as a new addition to my IRA account and feel fully confident in the consistent growth and earnings of the company. 

Have a great, healthy, and peaceful weekend, wherever you are in the world.