With Trends Stabilizing, It’s Time to Dip Your Feet Into This Sector
The old Wall Street saying, “Buy the rumor and sell the news” might be worth heeding right now in the travel sector.
This morning, I told War Room members that the airlines were all reporting weak numbers as a result of the COVID-19 spike that is taking place in the U.S. But dig a little deeper, and you’ll see that the news is actually not bearish going forward.
There may be an opportunity brewing the in the airlines sector – the news coming out is negative, but with a positive outlook, as most of the big airlines are seeing bookings lower now, but also picking up as cases of COVID-19 begin to plateau.
Looking backward and to today, the news definitely sounded bad. Traffic and capacity were heading lower.
But those were just the headlines…
Here was the real meat, if you decided to read past the headlines…
Delta Air Lines stated that booking trends have stabilized in the last 10 days. And it wasn’t alone in reporting good news.
From United Airlines…
The company’s long-term United Next4 targets remain unchanged as the current spike in cases has been significantly less impactful to date than prior spikes and is expected to be temporary in nature. Based on demand patterns following prior waves of COVID-19, the company expects bookings to begin to recover.
From American Airlines…
The company’s booked load factor for peak travel periods, including the fourth-quarter holiday periods, remains very strong.
Does any of that sound bearish to you?
To me, it’s saying that trends are stabilizing and should improve going forward. Of course, this is assuming that the COVID-19 spike begins to recede, which it’s already showing signs of doing.
For the savvy investor, the time might be right to dip a toe into this sector.
Action Plan: You can play individual names like United Airlines (Nasdaq: UAL), American Airlines (Nasdaq: AAL), Delta Air Lines (NYSE: DAL) or Southwest Airlines (NYSE: LUV). However, I would look to play the US Global Jets ETF (NYSE: JETS) of airline stocks for broader exposure. For a more speculative play, I would look to Hawaiian Holdings (Nasdaq: HA), which has yet to show the same type of recovery as the major airlines as far as share price is concerned.
If you don’t want to miss the kind of real-time analysis I gave members this morning, before the market opened, then join me in The War Room now! Look at what War Room members Rick and David posted this morning after I notified everyone about the airline opportunity…
“Thanks Karim for the heads-up on the airlines. There is solid volume and 15% gain since the open today on JETS. Jumped in on a multiday position at open, and I’m smiling like a Cheshire Cat!” – Rick R.
“BTO AAL 15Oct 20$ calls for $0.83, after Karim’s morning note regarding airlines.” – David D.
Then, 10 minutes later, David posted this follow-up…
“STC at $1.13, taking my quick 36%.”
If you want to get in on the action, before the rest of the investing herd figures it out, it’s time you leveled up. And right now, we are running an insane guarantee: 300 wins over the next year, or you get an additional year of FREE access to The War Room. But act now, before my publisher takes this offer away!