Bill Gunderson's Radio Play of the Day: Airline Stocks. Really

NEW YORK (TheStreet) -- Years ago I remember years making a vow to myself that I would never buy an airline stock. If it wasn't rising fuel prices it was the Sept. 11, 2001, attacks. If it wasn't 9/11, it was some problem with the fuselages. It never ends.

History will point to more bankruptcies in this industry than any other sector of our economy. If it is not a pilot strike, it's a mechanics strike and on, and on and on.

But I have been really surprised recently to see the strength in the transportation sector. This is the sector made up of boring stocks such as airlines, railroads and trucking companies.

I own several of those railroad stocks including Union Pacific ( UNP), American Railcar ( ARII), Genesee and Wyoming ( GWR) in the accounts that I manage, and they have been anything but boring.

I also own a trucking stock, J B Hunt ( JBHT), which has been very exciting of late. I hate it when a big rig almost runs me off the road on a trip, but I love it when my stocks are hitting new highs.

Let's have a peek at my current list of top-ranked sectors in the market:

Data from Best Stocks Now App

There it is, the transportation sector, ranked just below the biotechs, builders, and health-care stocks -- the same transportation sector that also houses the airlines stocks.

Don't even tempt me. I swore off airlines over a decade ago!

O.K., I will just have a peek at the dessert menu.

Data from Best Stocks Now App

Small- and mid-cap stocks are a sweet spot in the market today. It looks like U.S. Airways ( LCC) is not only in a leading sector, but also in a leading asset class right now.

The stock is currently trading at just 5.5 times forward earnings. Desserts are on sale right now. Really?

I am still not tempted.

Data from Best Stocks Now App

The stock has blown away the returns of the market over the last one, three and five years. It is up a whopping 133% over the last 12 months.

Did someone say 5.5 times forward earnings?

Data from Best Stocks Now App

I don't really believe the analysts consensus estimate of 65% growth per year over the next five years. If the company can grow their earnings by 6% or more, I would still be buying it at a discount to earnings.

When I perform my own math on the shares, I come up with a conservative five-year target price of $31. That is substantially higher than the current price of the stock.

No, I swore off airlines a long time ago. I am not going to give in!

When I take into consideration the performance and the valuation of the stock, I come up with a stock that ranks #17 out of the 3,293 stocks that I follow. It also earns a Gunderson Grade of "A."

Data from Best Stocks Now App

I refuse to buy a stock that does not have a good stock chart. I hate downtrends, and sideways trends are blah. Topping out trends that are rolling over really scare me. I like fresh new uptrends if I can find them (along with performance and value.)

I just know that there is no way that an airline stock could have a good stock trend, too.

Not a good chart, too! I will never buy another airline stock. I promised myself. I also swore off cheesecake in January. Just my luck, I stayed right next door to a Cheesecake Factory over the weekend. That slice of Peanut Butter Fudge sure was delicious!

You can also listen to my analysis of the stock on my radio show, Best Stocks Now, by clicking here.

At the time of publication aggressive/moderate growth clients of Gunderson Capital Management are currently long U.S. Airways.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

More from Opinion

Why Ether and Ripple -- But Not Bitcoin -- Prices Might Come Under Pressure Soon

Why Ether and Ripple -- But Not Bitcoin -- Prices Might Come Under Pressure Soon

Daily Chatter: Here's Where the Markets Stand After Tuesday's Beating

Daily Chatter: Here's Where the Markets Stand After Tuesday's Beating

3 New Investing Myths That Must Be Busted

3 New Investing Myths That Must Be Busted

Why a Global Stock Market Crash Is Coming

Why a Global Stock Market Crash Is Coming

Sears CEO Eddie Lampert Looks Like He Is Sucking Company Dry

Sears CEO Eddie Lampert Looks Like He Is Sucking Company Dry