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RJET
Again, I posted this on the former Portal a few weeks ago.
"I bet some of you are thinking:
"RJET? Hmm... The last three letters seem to spell trouble but I'm not sure what it means:-\. OMG It's an AIRLINE company! Run for cover!"
Well,
(1)I currently have a bearish position on oil.
(2)I believe the sentiment in airline stocks is excessively bearish(contrast with oil stocks). The Airlines index($XAL at stockcharts.com) broke out of a rectangle, met the minimum price objective and is up 20% to test resistance again.
(3)Many of these are new/have experienced bailouts, so they are given a new start. Not very fair for those with pensions terminated, but it provides a good opportunity to buy the stock of airline companies.
(4)I have a former chess student who works in the airlines industry(he fixes planes or something like that) He believes people are flying more. Gotta believe those in an industry.
(5)RJET has had exponential growth in the past few years. Net assets have grown nearly 1000% in the past three years.
(6)It has broken out of a flat base.
Now factors against it:
(1)Oil is only in an intermediate correction
(2)RJET has been growing rapidly by debt. It has doubled its long term debt last year to buy equipment(planes I suppose) It is currently highly leveraged and a downturn in the industry will kill it.
However, I believe the factors on the "good" side so overwhelm those on the bad side .
I'll look for more gems in the airlines industry.
I did post a buy on SKYW on RDPD a few months ago at $23(now at $28), alas, I also recommended a buy for NWAC(OOPS). It seems there are some good picks in the airlines industry, especially since every living soul is bearish . "
Well, it's up over 6% already since I recommended it. Still very bullish outlook.
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