Atlas Air (AAWW) Dramatically Undervalued Amid Several Strong Positives - Barron's
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Atlas Air Worldwide Holdings (Nasdaq: AAWW) is ticking higher Monday following a positive mention in Barron's over the weekend.
Barron's noted that, amid recent gains, shares are undervalued at current levels. Shares are going for about 8 times FY14 earnings, versus its historic average of about 12 to 15 times. Given strong results and guidance issued last week, some investors see the pop as a start of a trend that might continue through the $60 level.
One of the bigger concerns for investors has been Atlas Air's military cargo and commercial charter units. Commercial charter, which provides for short-term, "as needed" bookings, held down revs last quarter and the company cut its outlook in this segment.
Altas' core business of leasing planes and crews, performing maintenance, and provoking insurance remains solid, Barron's notes.
One move that has benefited investors is Atlas moving to Boeing (NYSE: BA) 747-8 aircraft. The company said that each 747 used adds 4 cents per share per month to earnings. The company plans to add one more, bringing its total to nine for 2013.
Atlas also has a contract with Boeing called "Dreamlifter." Under the contract, Atlas picks-up and delivers outsourced parts from around the globe used in construction of the 787 Dreamliner.
Continued military spending cuts, any further 787 problems, and weakness in international markets are risk factors for Atlas.
Shares are up 7.8 percent in morning trading.
Barron's noted that, amid recent gains, shares are undervalued at current levels. Shares are going for about 8 times FY14 earnings, versus its historic average of about 12 to 15 times. Given strong results and guidance issued last week, some investors see the pop as a start of a trend that might continue through the $60 level.
One of the bigger concerns for investors has been Atlas Air's military cargo and commercial charter units. Commercial charter, which provides for short-term, "as needed" bookings, held down revs last quarter and the company cut its outlook in this segment.
Altas' core business of leasing planes and crews, performing maintenance, and provoking insurance remains solid, Barron's notes.
One move that has benefited investors is Atlas moving to Boeing (NYSE: BA) 747-8 aircraft. The company said that each 747 used adds 4 cents per share per month to earnings. The company plans to add one more, bringing its total to nine for 2013.
Atlas also has a contract with Boeing called "Dreamlifter." Under the contract, Atlas picks-up and delivers outsourced parts from around the globe used in construction of the 787 Dreamliner.
Continued military spending cuts, any further 787 problems, and weakness in international markets are risk factors for Atlas.
Shares are up 7.8 percent in morning trading.
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