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On January 8, 2014, JetBlue (NASDAQ: JBLU) slumped to under $8.50 a share due to cancelled flights. An article ran on Benzinga, "3 Reasons to Buy JetBlue on the Decline." After that article, JetBlue rose to around $9.45 in late January. By contrast, an article in Benzinga called for shorting Bon-Ton Stores in early December after it had risen about 50 percent to about $17.50.
Here are the three main reasons JetBlue was a long call and Bon-Ton Stores was a short.
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JetBlue was down to the market overreacting. A previous article on Benzinga discussed when this happens as it is the stock "reverting to the mean." That happens when the event is temporary, as with JetBlue. But for Bon-Ton Stores, sales and earnings were plunging. The debt load was staggering. Long story short: JetBlue's problems were short-term while those for Bon-Ton Stores were long-term.
What makes the problems long-term for Bon-Ton Stores is the competition in the retail sector.
It has to go against Target (NYSE: TGT), Wal-Mart (NYSE: WMT), and Amazon (NASDAQ: AMZN). Sure the competition in the airline sector is tough. But JetBlue has lucrative landing slots on the East Coast and other parts of the country. Competitors can come on strong on price, but nothing the landing slots are there for JetBlue.
JetBlue is positioned well for the way the economy is developing and Bon-Ton Stores is not.
More people are flying as the economy is recovering. That is bullish for JetBlue. More people are shopping online, which is why Amazon is doing such damage to the retail sector. That is bearish for Bon-Ton Stores.
The future looks to be the same for both stocks.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.