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ETFs & Stocks to Fly on Busy Labor Day Air Travel

Sweta Killa

American airlines are ready to take off on Labor Day weekend travel buoyed by last-minute trips, steady economic growth in four years, low unemployment, historic high consumer confidence and historic low fares (read: Americans' Confidence at About 18-Year High: Bet on These ETFs).

According to Airlines for America (A4A), about a record 17.5 million Americans are expected to fly on U.S. airlines worldwide over the Labor Day holiday (Aug 28 to Sep 3), up 4% from last year. In order to accommodate the additional 95,000 daily passengers during the Labor Day travel period, U.S. airlines increased the number of seats available per day by about 109,000 despite the grounding of the Boeing 737 MAX.

The busiest travel day is projected to be Aug 30 when an estimated 2.98 million passengers will fly onboard U.S. airlines. This was followed by Aug 29 and Sep 2, with 2.82 and 2.71 million passengers traveling, respectively. AAA also estimates that national gas price average for Labor Day is on track to be cheapest in three years at $2.59. This is much below last year’s holiday gas price average of $2.83 and four cents cheaper than 2017’s Labor Day ($2.63) (read: 5 Leveraged/Inverse ETFs Up 25% Plus at Halfway Q3).

Huge travel demand should boost revenues and profitability for the airlines, thereby leading to skyrocketing share prices. Investors shouldn’t miss this opportunity and could tap this trend through ETF and stocks that stand to profit big time from the upbeat Labor Day travel trend.

U.S. Global Jets ETF JETS

This pure-play ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 34 securities that are heavily concentrated on the top four firms with double-digit allocation each. Other firms hold less than 4.2% share. The fund has gathered $51.8 million in its asset base while sees moderate trading volume of nearly 29,000 shares a day. It charges investors 60 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Time to Buy Airlines ETF on Mixed-to-Upbeat Earnings?).

Delta Air Lines Inc. DAL

This Georgia-based company provides scheduled air transportation for passengers and cargo in the United States and internationally. The stock saw positive earnings estimate revision of a penny for this year over the past 30 days, with expected growth of 25.13%. The stock has a Zacks Rank #1 (Strong Buy) and VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Copa Holdings S.A. CPA

This Panama-based company provides airline passenger and cargo services. It saw rising earnings estimate of 75 cents for this year over the past 30 days, with expected growth of 20.55%. The stock has a Zacks Rank #1 and VGM Score of B.

United Continental Holdings Inc. UAL

This Illinois-based carrier provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa and Latin America. The stock has seen positive earnings estimate revision of 8 cents for this year over the past 30 days, with expected growth of 28.15%. It has a Zacks Rank #2 and VGM Score of A.

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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
 
U.S. Global Jets ETF (JETS): ETF Research Reports
 
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