Hawaiian Air: Ready for Flight?

02/23/2016 8:00 am EST

Focus: STOCKS

Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Our latest featured breakout stock is a leader in the airline sector; the stock is in a 12-week base and is in good position to breakout at any time, asserts Leo Fasciocco, editor of Ticker Tape Digest.

Hawaiian Airlines (HA) offers daily passenger service between Hawaii and Las Vegas, as well as the key West Coast gateway cities of Los Angeles, San Francisco, Seattle, Washington, and Portland.

It also provides daily service among the major islands of Hawaii and bi-weekly service to Pago Pago, American Samoa, Papeete, and Tahiti.

The stock’s long-term chart shows the shares climbing from $2.60 back in 2007 to a peak of $11.10 in 2008. The stock then trended sideways until 2013 when it began to turn up.

Since then, the stock has soared to an all-time peak of $40.13 late last year. Recently, the stock has rallied strongly and is now in position to breakout over its resistance line.

Its momentum indicator is strongly bullish. The accumulation and distribution line compliments the price action.

HA is poised to post a big earnings’ gain this year. It is benefiting from lower fuel costs. Earnings growth for the next two quarters will be very strong.

That should be the key driver for the stock. The stock carries a p/e ratio of just 7. We see that as attractive to value investors.

The Street is forecasting a 46% surge in net this year to $4.50 a share from $3.09 a year ago. Going out to 2017, analysts predict a 3% gain in net to $4.64 a share from the anticipated $4.50 this year.

We suggest accumulation of a partial stake in HA with further buying to be done on a breakout over $39.65. We are targeting HA for a move to $46 after a breakout.

A protective stop can be placed near $37 after a breakout. Institutional sponsorship is excellent. 

The largest fund buyer recently was the 4-star rated Hennessy Cornerstone Mid-Cap 30 Investor, which purchased 985,300 shares as a new position.

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