Are Smart Investors Making the Right Decision? Alaska Air Group Inc. (ALK)

Alaska Air Group Inc. (NYSE: ALK) stock jumped 0.59% on Thursday to $39.36 against a previous-day closing price of $39.13. With 1.47 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.79 million shares. During the session, the Airlines company that operates in wider Industrials sector, reached to the highest price of $39.49 whereas the lowest price it dropped to was $38.87. The 52-week range on ALK shows that it touched its highest point at $57.18 and its lowest point at $37.19 during that stretch. It currently has a 1-year price target of $63.36. Beta for the stock currently stands at 1.55.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ALK was down-trending over the past week, with a drop of -1.65%, but this was down by -13.32% over a month. Three-month performance dropped to -21.97% while six-month performance fell -2.53%. The stock lost -12.42% in the past year, while it has lost -8.34% so far this year. A look at the trailing 12-month EPS for ALK yields 1.23 with Next year EPS estimates of 6.71. For the next quarter, that number is 2.23. This implies an EPS growth rate of -87.60% for this year and 13.67% for next year. EPS is expected to grow by 22.48% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -40.00%.

Float and Shares Shorts:

At present, 127.44 million ALK shares are outstanding with a float of 126.83 million shares on hand for trading. On Aug 30, 2023, short shares totaled 4.05 million, which was 3.19% higher than short shares on Jul 30, 2023. In addition to Mr. Benito Minicucci as the firm’s Pres, CEO & Director, Mr. Shane R. Tackett serves as its CFO & Exec. VP of Fin.

Institutional Ownership:

Through their ownership of 82.25% of ALK’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 49.82% of ALK, in contrast to 31.50% held by mutual funds. Shares owned by individuals account for 0.97%. As the largest shareholder in ALK with 10.97% of the stake, The Vanguard Group, Inc. holds 14,035,277 shares worth 14,035,277. A second-largest stockholder of ALK, Victory Capital Management, Inc., holds 8,029,161 shares, controlling over 6.28% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in ALK, holding 6,144,063 shares or 4.80% stake. With a 4.24% stake in ALK, the Victory Sycamore Established Valu is the largest stakeholder. A total of 5,420,000 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 3.10% of ALK stock, is the second-largest Mutual Fund holder. It holds 3,965,868 shares valued at 192.86 million. Vanguard Small Cap Index Fund holds 2.59% of the stake in ALK, owning 3,317,768 shares worth 161.34 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, ALK reported revenue of $2.66B and operating income of $333.00M. The EBITDA in the recently reported quarter was $354.00M and diluted EPS was $1.09.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ALK since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With ALK analysts setting a high price target of $75.00 and a low target of $50.00, the average target price over the next 12 months is $63.31. Based on these targets, ALK could surge 90.55% to reach the target high and rise by 27.03% to reach the target low. Reaching the average price target will result in a growth of 60.85% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded ALK stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 37 over the past year. The total number of shares bought during that period was 101,688 while 42,313 shares were sold.

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