Encouraged by an expanding economy, employment gains, higher consumer confidence, surging household net worth, and persistently low fares, a higher number of Americans are planning to fly to their favorite spring destination.
This is especially true as the report from the U.S. airlines group, Airlines for America (A4A), shows that air travel is expected to reach an all-time high between Mar 1 and Apr 30. About 150.7 million passengers (2.47 million per day) would fly over this two-month period, up 4% from last year. In order to accommodate 94,000 additional daily passengers, U.S. airlines will likely increase the number of seats by 114,000 per day across their networks (see: all the industrials ETFs here).
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 ETFs and stocks that stand to profit big time from the upbeat spring travel trend.
U.S. Global Jets ETF JETS
This fund 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 at least 11% allocation each. Other firms hold less than 4.4% share. The fund has gathered $104.9 million in its asset base while sees a moderate trading volume of nearly 49,000 shares a day. It charges investors 60 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 5 Amazing Top-Ranked ETFs & Stocks on Sale).
iShares Dow Jones Transportation Average Fund IYT
While this ETF provides exposure to the broad transportation sector by tracking the Dow Jones Transportation Average Index, airlines account for one-fourth of the portfolio. The fund holds a small basket of 20 stocks with heavy concentration and dominance in the top firm. It has accumulated $847.6 million in its asset base while sees a good trading volume of around 235,000 shares a day. It charges 44 bps in fees and expenses and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
SPDR S&P Transportation ETF XTN
This fund also targets the broader transport sector and follows the S&P Transportation Select Industry Index. Holding 42 stocks in its basket with AUM of $234.3 million, it is well spread out across various components with none holding more than 2.6% of assets. About 32.6% of the portfolio is dominated by trucking while airlines takes 25% share. The fund charges 35 bps in fees per year from investors and trades in a light volume of nearly 36,000 shares a day. XTN has a Zacks ETF Rank #3 with a High risk outlook (read: Transport ETFs to Ride High on Huge Earnings Beat by FedEx).
American Airlines Group Inc. AAL
This Texas-based company provides scheduled passenger, freight and mail service primarily in North America, the Caribbean, Latin America, Europe and the Pacific. It saw rising earnings estimate of six cents for this year over the past 30 days with an expected growth of 21.52%. The stock has a Zacks Rank #3 and a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Copa Holdings S.A. CPA
This Panama-based company is a leading Latin American provider of passenger and cargo service. It saw positive earnings estimate revision of four cents for this year over the past month with an expected growth of 19.98%. The stock has a Zacks Rank #3 and a VGM Style Score of A.
United Continental Holdings Inc. UAL
This Illinois-based company provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa and Latin America. It transports people and cargo through its mainline and regional operations. The stock saw positive earnings estimate revision of 29 cents for this year over the past 30 days with expected growth of 14.79%. It has a Zacks Rank #3 and a VGM Score of A.
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US GLOBAL JETS (JETS): ETF Research Reports
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