US airline stocks look set to rise after being pushed down by reduced earnings expectations, high fuel prices and an uncertain US economic recovery, according to a report in the September 12 issue of business weekly Barron's.
United Continental, Delta, Alaska Air, Southwest Airlines and JetBlue are particularly good bets, according to the report.
The airline industry has steadily grown profits this year despite a jump in fuel prices, an improvement in a tougher business environment that has not been reflected in airline stock prices, Barron's reported.
Industry debt levels remain high, but some companies including Delta are reducing their leverage. Airline companies, in general, have significant amounts of cash.
One stock that risk-averse investors might steer clear of is AMR, parent of American Airlines, Barron's wrote, noting that its high cost structure means it is losing money. AMR was the only major carrier to avoid bankruptcy, but that means it didn't restructure its pricey staffing agreements, Barron's wrote.