Are regional airlines different???
I had a little room in my Wall Street Survivor portfolio and this weekend I had determined I would still buy into this market so I went bargain hunting in these down days. I used Barchart to find which stocks were continuing to hit new highs even while the market was sliding backwards and came up with Linhas Aereas Inteligentes ( GOL ) a Brazilian ADR that is a regional airline. Before you start screaming that I'm a total idiot to consider any airline give my thinking a try. Airlines in the rest of the world are a little different that our airlines in the US. In countries like Brazil they is not an alternate transportation choice. For much of the country there is not a proper roadway or rail choice so air travel is the only choice. This airline moves people, cargo and mail bags so they are not as passenger dependent and ticket price sensitive like in the US. Competition also isn't as keen.
The stock has hit new highs in 14 of the last 20 trading sessions and is 5 for 5 more recently. There has been a 63.48% price appreciation in the last 65 days and BarChart's technical indicators have 12 of 13 buy signals for a 96% buy rating.
The 9 analysts following the stock look for a 26.2% increase in sales next year and a profit improvement of 136.8% this year. They have 4 buy, 4 hold and 1 sell recommendations. The lone sell was from Citi back in January and the stock has had good price appreciation since that date. The most current review is from Argus this August and they went from sell to buy.
On some other sites Wall Street Survivor Mark's checklist has a Survivor Sentiment rating of 5/5 and a fundamental rating of 4/5. Over in Motley Fool the members think the stock will out perform the market by a vote of 313 to 37 with the All Stars in agreement 97 to 10. The mixed review comes from the Wall Street columnists that Fool follows with a vote of 5 to 4. The 4 who say sell did so back earlier in the year and have not revisited their signal. The stock has had pretty good price appreciation since then so I'll discount those sell recommendations.
The stock has what I'm looking for:
1 - Hitting new highs in the current market at least 50% of the time
2 - If Wall Street brokerages are following the stock - no current trash talking
3 - The other sites do not have a major disagreement with my pick
Recommendation: I'm going to add Linhas Aereas Inteligentes (GOL) to my Wall Street Survivor portfolio around 15.78 with a protective stop loss no lower than 12.
Disclosure: I hold no positions in this stock at the time of publication
Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com