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JetBlue Airways Corporation Message Board

  • barrybook2001 barrybook2001 Jan 22, 2013 12:06 PM Flag

    LBLU trading below tangible book value

    While JetBlue is a leader in flying to “fun” destinations, it is also increasing its business travel share, and is the number one airline by seat share in Boston at 23%. Compared to those of some other airlines, JetBlue's common stock appears undervalued based on a number of measures. Most importantly, JetBlue has a price-to-earnings-to-growth (PEG) ratio of 0.3, which is comparable to the PEG ratios for Spirit Airlines, Alaska Air Group, Delta Air Lines, and Southwest Airlines of 0.3, 0.6, 0.2, and 0.3, respectively. Also, JetBlue is the only company that trades below its tangible book value, which signifies that this is a classic value investment stock. JetBlue is a relatively new company (it started operations in 2000) and it has the worst profitability among its competitors, with a net margin of 3%. However, the company recently ranked at the top of a North America satisfaction survey by J.D. Power, and this, together with its continued efforts to improve profitability while growing, bodes well for investors.

    Sentiment: Strong Buy

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