UBS Likes Major Airline Stocks, We Like JetBlue

JetBlue Airways Corporation (NASDAQ:JBLU) needs no introduction to Master Picks subscribers.  UBS upgraded five major airline stocks on Friday and of course left out JetBlue.  Thus the Masters are once again going to bat for JetBlue, which happens to be the only airline company that has 1.1 million followers on Twitter, more than any company except Whole Foods (NASDAQ:WFMI) and Zappos.com.

This past week JetBlue shares fell 7% and are now trading just at $6 a share.  Airline stocks rallied Friday, except JBLU, bucking a downturn in the broad market after the investment firm UBS raised its ratings for five major carriers, including US Airways, Continental and American parent AMR Corp.

WHY CARE?

Here's why, thanks to an outstanding article by CNN Money published back on Sept 3rd:

While revenues are down slightly ($1.4 billion in 2009's first half), this year JetBlue will add nine new planes, expand into eight new cities, and hire about 2,300 new people.

At this rate the company, which ranked No. 629 on the Fortune 1,000 list last year, is a good bet to join the 500 before long. Its rivals, by contrast, are retiring aircraft, slashing capacity, and laying off thousands.

Most surprising: JetBlue is modestly profitable, earning $14 million during the second quarter, a period when its major competitors -- including Delta (DAL), American (AMR), United (UAUA), Continental (CAL), and US Airways (LCC) -- collectively reported losses of about $1 billion.

Finally, Barger's desire to lead these pep rallies for newcomers -- he has been to about 250 in the past decade -- indicates that the culture matters at JetBlue. While the airline is known for the amenities in its cabin and a brand-new $875 million terminal at New York's J.F.K. airport, this approachable CEO says the airline's friendly relationship with its crew members is what sets it apart.

 

Its only a matter of time before Wall Street comes to the JetBlue table, why not be there ahead of the curve?

Disclaimer: No positions in any of the securities mentioned in this publication.

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