Financial Markets News: airline stocks CRASH HARD

In recent years, airline stocks have been a popular buy for many investors, although this particular sector is known for volatility and those with weak stomachs often choose to steer clear. However, analysts have performed a sharp turnaround just in the past few weeks, and now many fear that airline stocks are actually in an oversold position. Firms like Raymond James have been slashing their ratings on popular buys like American Airlines and Delta, creating grave concerns among investors[1].

When a stock is oversold, this means that the price of shares is considered lower than its true value. While that might sound like great news for investors (and it can be), it also can indicate panic to come, meaning that if you have not got tolerance for turbulence, airline stocks might not be the right buy for you. Investopedia notes that in many cases, oversold stocks tend to fall much farther before rising again, even if they are, at the heart of it, worth far more than their share prices indicate. In the case of airline stocks, 24/7 Wall St. analysts say that airline stocks will probably continue to be oversold at least in the near future, though they will likely recover and normalize rather than tank permanently.

At time of publication, Delta (DAL) shares were valued at just over $40 and trending downward. American Airlines (AAL) shares had similar values and were also trending downward. Do you think that airline shares are oversold? Does that make you want to buy?

Thank you for reading the Bryan Ellis Investing Letter!

Your comments and questions are welcomed below.

[1] http://247wallst.com/transportation/2015/06/08/are-airline-stocks-becoming-grossly-oversold/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JUN092015A&utm_campaign=DailyNewsletter

About the Author (Author Profile)

Carole Ellis is editor in chief of the Bryan Ellis Investing Letter. Under Carole’s leadership, the Bryan Ellis Investing Letter has grown to over 700,000 subscribers, making it one of the largest real estate newsletters in the world. Each day, Carole directly impacts the daily thinking and conversations of real estate investors worldwide by providing thought-provoking analysis and commentary on news topics relevant to serious real estate investors.

Carole has a strong background in research and in the management of respected publications. She holds a degree in English Literature from the University of Georgia, and has substantial research experience in plant biology. She is the former editor of and writer for the University of Georgia’s Research Magazine. She’s also the author of hundreds of articles and multiple books and home study courses published under the names of her clients, many of whom are well known, highly respected real estate entrepreneurs as well.

Carole makes her home in Kennesaw, Georgia with her husband Bryan and 4 children.

Comments (1)

Trackback URL | Comments RSS Feed

  1. G13man says:

    these airline companies go bankrupt every other decade !
    or sooner.!
    they over reach and then go bust .
    i would trade , but not invest in them !

Leave a Reply

Category: Financial Markets