Originally Posted by FlyerJosh
It's a high risk stock. Why? Because, first off it is over-valued when compared to other airlines. JB is trading near $20/share. That's higher than SWA (~16 3/4), AirTran (~16 1/5), Continental (~16).
Just for clarification, the actual price of a given stock (i.e. $20 vs. $16) has
nothing to do with its valuation compared to another.
It’s what that $20 actually buys in value (or
expected future growth) that determines the worth of a stock. Essentially it is the 'total value' of the company divided by the number of shares outstanding.
For an EXTREME example, compare Berkshire Hathaway to General Electric. Both are profitable, and both have a price earnings (P/E) ratio of ~20 but GE is priced @ ~$35 and BRK-A @ ~$90,500!!!
http://finance.yahoo.com/q?s=BRK-A,GE&d=s