(Written by Alexander Crawford. Data sourced from Finviz.)
Even though Hurricane Irene caused airlines to cancel over 14,000 flights last weekend – a big swipe at earnings - all major airline stocks closed in the green on Tuesday in a widespread rebound. Investors must like the good weather too.
But according to Susan Aluise at InvestorPlace, last week’s flight cancellations could cost airlines more than $250 million, a big hit for an industry with slim margins.
She goes on to give three reasons why airlines may be under more pressure late in the summer: Fuel price volatility and bad press on fare increases and fees already stress earnings. Flight cancellations (also from last winter’s blizzards, the Japan earthquake and tsunami, and the volcanic ash cloud over Europe) have been expensive. And much of the Atlantic hurricane season still lies ahead.
Aluise says, “airline stocks likely will take one step forward and two steps back in the short term,” but she cautions against counting the industry out.
“Don’t count out a long-term play on airlines with the strongest competitive focus and aggressive cost control.”
For a look at what the market thinks, here’s a list of the most highly shorted airline stocks today, with short floats above 10%. Do you think these names will see short covering soon?
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List sorted by short float.
1. Allegiant Travel Company (ALGT): Regional Airlines Industry. Market cap of $892.39M. Float short at 25.47%. The stock has had a good month, gaining 11.13%.
2. Republic Airways Holdings Inc. (RJET): Regional Airlines Industry. Market cap of $157.91M. Float short at 19.98%. The stock is currently stuck in a downtrend, trading 5.7% below its SMA20, 23.96% below its SMA50, and 42.94% below its SMA200. The stock has performed poorly over the last month, losing 23.42%.
3. AMR Corporation (AMR): Major Airlines Industry. Market cap of $1.19B. Float short at 19.35%. The stock has performed poorly over the last month, losing 13.59%.
4. US Airways Group, Inc. (LCC): Major Airlines Industry. Market cap of $894.68M. Float short at 16.06%. The stock has lost 38.94% over the last year.
5. JetBlue Airways Corporation (JBLU): Regional Airlines Industry. Market cap of $1.30B. Float short at 15.39%. The stock has had a couple of great days, gaining 6.07% over the last week.
6. United Continental Holdings, Inc. (UAL): Major Airlines Industry. Market cap of $6.20B. Float short at 11.27%. The stock has had a couple of great days, gaining 7.63% over the last week.