NEW YORK (TheStreet) –- The seven airline companies profiled here reported their quarterly results late last month, and six of them beat analysts' earnings-per-share estimates.
JetBlue (JBLU) matched estimates, and the stock set a multiyear intraday high at $11.59 following its report on July 24. It's up 34% year to date.
The largest earnings beat was posted by United Continental (UAL), which also reported on July 24. The airline set a multiyear high at $49.28 that day, but slipped to a lower altitude, testing its 200-day simple moving average at $42.21 on Friday. The stock has the smallest year-to-date increase of the seven stocks, with a gain of 14%.
Each of the other five airliners has ascended to all-time highs in 2014. Southwest Airlines (LUV) set an all-time intraday high at $29.70 on July 25 after it reported earnings that topped estimates on July 24.
Spirit Airlines (SAVE) set an all-time intraday high at $70 after reporting higher-than-expected earnings on July 29. Southwest and Spirit have gains of 50% and 46% year to date, respectively, the best gainers among the seven profiled today.
Alaska Air (ALK), Delta (DAL) and Hawaiian Holdings (HA) set their all-time highs between June 3 and June 9 at $50.49, $42.65 and $16.49, respectively, with year-to-date gains of 18%, 31% and 44%, respectively.
Here are the post-earnings profiles for seven airlines. Two “crunching the numbers” tables follow.
Alaska Air ($43.21) set its all-time high at $50.49 on June 3, and fell after it reported on July 24 earnings that topped analysts' estimates. The stock fell as low as $41.84 on Friday, before closing above its 200-day simple moving average at $43.01.
The weekly chart is negative with its five-week modified moving average at $46.33 in a pattern that shows a parabolic bubble popping. Semiannual and annual value levels are $37.98 and $26.40, respectively, with weekly and quarterly risky levels at $45.95 and $50.05, respectively.
Delta ($36.24) set its all-time high at $42.65 on June 5, and hit an air pocket on July 24 after it reported earnings that topped estimates on July 23. The low of $34.59 on Friday is above its 200-day SMA at $33.58.
The weekly chart is negative with its five-week MMA $37.67 as another stock-specific bubble appears to be popping. Weekly and semiannual value levels are $33.64 and $28.79, respectively, with quarterly and monthly risky levels at $39.14 and $42.04, respectively.
Hawaiian Airlines ($13.90) set its all-time intraday high at $16.49 on June 9, and reported earnings that topped analysts' estimates on July 22. The stock traded as low as $12.67 on July 8, and went as high as $15 on July 24. On Friday, Hawaiian Airlines closed between its 200-day SMA at $12.09 and its 50-day SMA at $14.13.
The weekly chart is negative with its five-week MMA at $13.95 in another bubble pattern. Quarterly and semiannual value levels are $12.77 and $12.57, respectively, with a monthly risky level at $17.41.
JetBlue ($11.46) dipped to $10.50 on Aug. 1, holding its 50-day SMA at $10.68.
The weekly chart is positive but overbought with its five-week MMA at $10.78. Quarterly and monthly value levels are $10.00 and $9.88, respectively, with a weekly pivot at $11.41.
Southwest Airlines ($28.28) held its 50-day SMA at $27.53 at Friday's low.
The weekly chart is positive but overbought with its five-week MMA at $27.69 as the stock continues to seek a higher orbit, but the pattern is an inflating bubble. Quarterly and semiannual value levels are $25.64 and $19.70, respectively, with a weekly pivot at $28.63 and monthly risky level at $30.39.
Spirit Airlines ($66.50) held its 50-day SMA at $64.01 at its low on Thursday of $63.10.
The weekly chart is positive but overbought with its five-week MMA at $64.67. A quarterly value level is $59.32 with monthly and weekly risky levels at $68.96 and $69.10, respectively.
United Continental's ($42.95) weekly chart is neutral with Friday’s close below its five-week MMA at $44.24 but with a rising 12x3x3 weekly slow stochastic. Semiannual and weekly value levels are $41.14 and $39.88, respectively, with a semiannual pivot at $42.75 and quarterly and monthly risky levels at $45.64 and $49.43, respectively.
Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
The table also shows its 12-month forward price to earnings ratio and dividend yield.
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: (stocks below a moving average listed in Red are below that moving average)
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three- to five-year horizon.
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six- to 12-month horizon.
Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell
This table shows the date the company reported quarterly results, the earnings per share and the beat or miss.
The table then presents the levels at which to buy on weakness and where to sell on strength.
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff
TheStreet Ratings team rates SOUTHWEST AIRLINES as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUTHWEST AIRLINES (LUV) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SOUTHWEST AIRLINES reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SOUTHWEST AIRLINES increased its bottom line by earning $1.06 versus $0.56 in the prior year. This year, the market expects an improvement in earnings ($1.79 versus $1.06).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Airlines industry average. The net income increased by 107.6% when compared to the same quarter one year prior, rising from $224.00 million to $465.00 million.
- The revenue growth significantly trails the industry average of 51.0%. Since the same quarter one year prior, revenues slightly increased by 7.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that LUV's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Airlines industry and the overall market on the basis of return on equity, SOUTHWEST AIRLINES has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: LUV Ratings Report