A near mirror image of Delta — in a very positive way — is United Continental (NYSE:UAL). Like those of Delta, United shares are down in 2011 — 15% in this case. That is significantly better than the 30%-plus losses for Delta, but it still offers investors today an opportunity to buy on the cheap. Perhaps helping United is the fact the company has beaten Wall Street estimates in each of the past four quarters.
With that strong performance, estimates for the period ending Sept. 30 have been climbing over the last 90 days. Three months ago, the estimate for profits was at $1.94 per share. Today, Wall Street analysts are looking for $2.08 per share. They are likely to be proven correct Thursday.
For the full year, United is expected to make a profit of $3.74 per share. That number jumps 37% in 2012, to $5.13 per share. At current prices, United trades for just five times current-year estimated earnings. I would challenge you to find another stock expected to grow profits at such a rate while also trading for such a low valuation. I would buy UAL at these levels.
Last edited by APC225; 10-24-2011 at 03:02 PM.