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Cooperman said that he is attracted to the airline sector given stable fuel costs as well as a "ridiculously low" valuation for the group. For instance, United Continental Holdings Inc (NYSE: UAL) is trading at just 5.2 times what his firm expects the company to earn next year.
Cooperman added that United Continental's share buyback program implies the company will buy back 8 percent of its entire stock.
Cooperman didn't go into greater detail, but taking a look at the group reveals the vast majority of airliners are trading with a P/E multiple below 10. The two exceptions include Hawaiian Holdings, Inc. (NASDAQ: HA), which is trading at a P/E multiple of 11.07 and SkyWest, Inc. (NASDAQ: SKYW) at 10.15.
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The average P/E multiple for the S&P 500 index is 25.04, so Cooperman may have a very valid point regarding the airline sector.
Here is a compilation of some of the P/E ratios of other airline stocks, according to Google Finance:
- United Continental Holdings Inc: 2.85.
- American Airlines Group Inc (NASDAQ: AAL): 3.49.
- Delta Air Lines, Inc. (NYSE: DAL): 5.98.
- JetBlue Airways Corporation (NASDAQ: JBLU): 7.09.
- Virgin America Inc (NASDAQ: VA): 7.80.
- Spirit Airlines Incorporated (NASDAQ: SAVE): 9.34.
- Alaska Air Group, Inc. (NYSE: ALK): 9.37.
- Southwest Airlines Co (NYSE: LUV): 9.76.
- Allegiant Travel Company (NASDAQ: ALGT): 9.83.
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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.