3 reasons to buy JetBlue on the decline
The polar vortex might have grounded hundreds of JetBlue flights, but that's not enough to keep shares from taking off.
Due to the terrible weather in the United States, JetBlue (JBLU) and other airlines have had to cancel many flights. JetBlue cancelled 300 flights on Monday, reducing operations at New York Kennedy, New York LaGuardia, Newark and Boston.
In a prepared statement, JetBlue advised that, "to ensure recovery of our operations as efficiently as possible and to be fully operable by tomorrow. This plan allows for 17 hours of rest for our equipment and crew members and time to service aircraft."
While the stock price of JetBlue declined due to this short-term situation, there are three reasons investors should expect it to take off again; and rise for the long term.
The first is that there is a bullish outlook for JetBlue due to the American Airlines merger with U.S. Airways. JetBlue along with Southwest Airlines is expected to pick up routes and landing slots. Many of these should be in the lucrative Northeast corridor. That is very bullish for the stock.
The next reason is a the macro outlook for the airline industry.
Air carriers have come back very strong from The Great Recession. The exchange-traded fund for the industry, Guggenheim Airline (FAA), is now around $43 a share.
Due to the impact of The Great Recession, it was under $24 in October 2012. It has risen about 20 percent over the last year of market action. The economy in the United States is improving, which is a very positive development for JetBlue and other airline companies. A recent article on Benzinga noted that JetBlue had "a strong domestic presence."
There is also momentum, as JetBlue is up more than 45 percent for the previous 52 weeks.
Momentum investors should be particularly bullish about JetBlue as it is up for the last week, month, quarter, six months, and year of trading. Volume has also been strong.
Due to the bull market and improving economic numbers from the United States, investors like JetBlue and other stocks do better when growth is rising. Guggenheim Airline has done well in recent market action, too. Buying should pick up again for JetBlue after this likely temporary dip.
JetBlue is now just under $8.70. The most recent recommendation for JetBlue was a buy on November 22, 2013 from CRT Capital with a target price of $12 a share.
Read more from Benzinga:
1) It's an airline stock
2) It's an AIRLINE stock
3) IT'S AN AIRLINE STOCK!!!!
Only clueless people get suckered into buying any airline stock !
Never - Never - Never ! (Keep trying you paid Stock Pumpers ! - I'm sure some people don't read the comments!)
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
As the market wades through what many people hope is a sixth bull year, some have grown nervous about how long the run can go.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.