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Proprietary Data Insights Financial Pros Top Airline Stock Searches This Month
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Returning To The Air According to TSA checkpoint data, we’re approaching 2019 traffic at our nation’s airports. Source: TSA.gov The International Air Transport Association (IATA) expects global travel to reach 103% of its 2019 total by 2024. In 2021, we hit 47%. IATA anticipates improvement to 83% and 94% in 2022 and 2023, respectively. The Only Time Anyone Ever Will Fight For A Seat On Spirit Airlines JetBlue (JBLU) made an all-cash offer for Spirit Airlines (SAVE) this week, confusing Spirit’s plans to combine with Frontier (ULCC). JetBlue says it wants Spirit for $700 million in synergy. Both fly Airbus fleets. They overlap on 11% of routes. Plus, the combo would increase JetBlue’s presence at some of the nation’s major airports. Consumer groups aren’t happy. They claim it would hurt competition and rob fliers of an airline floating relatively cheap fares. The DOJ might agree. Bring It On If you’re not pinching pennies and consider travel an experience, you probably don’t fly Spirit anyway. In Google Flights, the first thing I do is exclude Spirit (and Frontier) from my search. It’s akin to riding a Greyhound bus in the sky. $3.50 for a cup of coffee or soft drink. $9 for a beer!! You get a better experience drinking in a dark dive bar with Christmas lights hanging from the ceiling and a Greyhound bus parked out front year round. How To Play It? While I have my favorites for flying, I wouldn’t touch an individual airline stock with your ten-foot pole. Too much uncertainty from an execution standpoint. However, as the industry rebounds, consider the US Global Jets (JETS) and SPDR S&P Transportation (XTN) ETFs. The former focuses almost solely on airlines. The latter takes a broader approach with just over 33% of its holdings in airlines. No surprise – both ETFs have been hit hard over the last year. If you’re a long-term investor, now might be the time to build a position. Or wait to buy on event-driven dips. We’re probably in for at least a few more as air travel creeps toward a full rebound amid the possibility of broader economic shocks. |
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Return To The Office REITs |
Are Apple Employees Spoiled Brats? |
Key Takeaways:
As Apple prepares to welcome much of its workforce back to the office, some employees apparently aren’t even happy with the company’s hybrid plan. One day a week in the office by April 11. Two days by May 2. And three days by May 23. A large swath of employees have threatened to quit over Apple’s return-to-office (RTO) policy, with making profane posts to message boards, such as **** RTO! You know what Apple CEO Tim Cook’s thinking: Don’t let the door hit you in the ass on your way out. Like It Or Not, RTO Will Happen, To Some Degree I came across a cool website the other day that keeps track of office reopenings at big companies. To save you some time, here’s the quick and dirty – Regardless of the kicking and screaming, employees will have to RTO at some level. Source: Hubble Exactly how it all plays out depends on who you talk to. Netflix CEO Reed Hastings hates work from home. Google’s former HR boss thinks less in-person facetime puts employees at a disadvantage for raises and promotions. In opposition to what a majority of employees want, half of company leaders surveyed by Microsoft say their firms will require full-time presence in the office within a year. While being in the office has its well-publicized downsides, the Microsoft data raises concern over remote work-related digital overload: Source: Microsoft Based on the data and what’s actually transpiring, the office isn’t dead. At least not to the extent we thought it might be when we fixated on a new normal that’s shaping up to be quite similar to the old normal. How You Can Play RTO Last week in The Juice, we recommended considering apartment REITs because we think the media has overblown the city is dead narrative. We have a similar take on the office space. We also love the classic 1999 Mike Judge-directed film, Office Space, starring Jennifer Aniston. Before you clumsily type o-f-f-i-c-e s-p-a-c-e on your Roku, consider ticker B-X-P for Boston Properties (BXP). The company’s portfolio includes space across the U.S. with significant concentrations in Boston (34.2%), New York (27.7%), San Francisco (19.6%) and Washington, D.C. (15.1%). While BXP stock has actually performed well – it’s up about 19.5% over the last year – it could have room to run. Impressively, BXP is signing leases on the line which is dotted at a brisk pace (quick, name the movie the bold type is from. Answer at the end!). Source: Boston Properties Q4/2021 Investor Overview That 5.1 million square feet equals 289 leases executed. Don’t overlook the average term of 8.4 years. For the company’s 20 biggest office tenants, the weighted average lease term was 11.4 years, as of 2021. BXP also has 2.8 million square feet of office space under active development with 56% pre-leased to clients such as Google and Volkswagen. Additionally, it’s developing 1.2 million square feet for the life sciences sector. One of these co-owned projects, in South San Francisco, is already 100% pre-leased with initial occupancy slated for Q2, 2024. Glengarry Glen Ross, baby!! The Bottom Line: Even if companies will not require full-time office attendance, the plans they do have now and going forward will require office space. Because of its focus markets and strong slate of RTO tenants, we consider Boston Properties a top REIT pick for long-term investors. BXP pays an annual dividend of $3.92, currently yielding just over 3%. We provided just a glimpse of its holdings, however BXP’s overall portfolio and pipeline looks strong, particularly when you consider the (overblown) death of the office rhetoric. |
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