SEATTLE (TheStreet) -- Wall Street has found a new airline to love.
"Believe It Or Not, An Airline That Earned Its Cost of Capital; Bravo!," was the title of CRT Capital Group analyst Mike Derchin's report on Alaska (ALK), after the carrier reported fourth-quarter results, which showed a return on invested capital of 10.7% and also beat estimates. Moreover, Alaska leads the airline industry with an 11.1% pre-tax margin.
Alaska shares are up about 6% this year after rising 62% in 2010.But it's not just financial metrics that are benefiting perceptions of Alaska. Mergers have been reducing the number of airlines; once the merger between Southwest (LUV) and AirTran (AAI) is completed, Alaska will become the seventh biggest U.S. carrier. That brings enhanced visibility so that, essentially, Alaska is getting more notice exactly at the time when its performance has reached a peak. "We've been the small guy forever," said CEO Bill Ayer, in an interview. "We've had lots of competition (and) done really well against the competition. The future has never been brighter than at this moment. "
|Alaska Airlines CEO Bill Ayer|
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