We recently compiled a list of 7 Cheap Rising Stocks to Invest In. In this article we will look at where United Airlines Holdings, Inc. (NASDAQ:UAL) ranks among the cheap rising stocks.
The recent Fed rate cuts have been a major catalyst for the market, and have provided an additional boost to an already strong performance. The market started the day with another all-time high on September 26 and it seems like the cuts have been positively influencing market sentiment and activity.
Nevertheless, some experts are still saying that investors are moving with caution as the timeline moves closer to the US elections. Wisdomtree CEO, Jonathan Steinberg recently joined CNBC “Money Movers” as he discussed the impact of the Fed’s actions on market flows and noted that while the 50-basis-point rate cut may reduce recession risks, a significant amount of money remains on the sidelines.
Steinberg explained that many investors are cautious, keeping money in safe places like money market funds, due to uncertainty about the upcoming election and its potential impact on the economy. The differing policies of the candidates make it hard to predict market trends, so people are waiting to see the election results before making big investment decisions.
Expert Opinions on the Election
As the elections move closer, the sentiment has been quite mixed around the candidates as it seems like a very close one. While many have a solid opinion on their favorite candidates, economists and market experts might not be feeling the same.
In our article 7 Best Revenue Growth Stocks to Buy According to Analysts, we discussed Professor Jeremy Siegel’s opinions on the Fed cuts and upcoming elections. Here is an excerpt from the article:
“In a discussion about economic policies from the presidential candidates, Professor Siegel critiqued both sides as extreme and said that their policies are unlikely to be implemented. He said that there would be a divided government that would limit any drastic changes. He stressed that while some policies might be proposed, actual governance would lead to compromises rather than sweeping reforms.”
While Professor Siegel remained neutral and criticized both sides, Harvard professor and former Chairman of the Council of Economic Advisers, Jason Furman seems to be leaning more toward the Democratic Party. However, he too criticized the economic plans of both candidates on September 20 in an interview on CNBC’s Squawk Box.
Insights from Jason Furman on Fed Policy
In the discussion about the Fed’s rate cut policy, Furman noted that while he would have preferred a smaller 25-point cut, he does not believe the Fed has inside knowledge of serious economic risks.
He thinks the move only shows caution over rising unemployment. About the unemployment situation, he said that he is, “a little bit nervous about it too, just not quite as nervous as 50 basis points.”
Furman acknowledged that inflation has come down but pointed out that risks such as potential wage-driven inflation and the possibility of a recession are still there. He appreciated the Fed’s gradual approach, which allows for adjustments in future rate decisions if needed.
With that, we look at the 7 Cheap Rising Stocks to Invest in.
7 Cheap Rising Stocks to Invest In
Our Methodology
For this article, we used stock screeners to identify over 30 stocks with more than 10% share price gain over the last month and a forward price-to-earnings ratio of less than 15 as of September 27. We narrowed our list to 7 stocks most widely held by institutional investors. The 7 cheap rising stocks are listed in ascending order of their hedge fund sentiment which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
United Airlines Holdings, Inc. (NASDAQ:UAL)
FWD PE Ratio: 6.02
1-Month Stock Price Performance: 36.00%
Number of Hedge Fund Holders: 56
United Airlines Holdings, Inc. (NASDAQ:UAL) operates as a major provider of air transportation services across the globe. With a vast network that spans North America, Asia, Europe, Africa, the Pacific, the Middle East, and Latin America, the company transports both passengers and cargo through its mainline and regional fleets.
Additionally, it offers a variety of services including catering, ground handling, flight training, and maintenance for third parties, further diversifying its business operations. It ranks at 7 on our list of cheap rising stocks to invest in.
In the second quarter, the airline achieved a remarkable milestone by transporting 44.4 million passengers, which is the highest number for this period in the company’s history. It shows a strong recovery in air travel demand and a well-executed operational strategy.
On a single day during the quarter, the company set a new record by serving 565,000 travelers, which shows its capacity to handle high volumes while maintaining service quality. Moreover, its international capacity was 35% greater than that of its closest U.S. competitor, a sign of its strong market position and extensive global reach.
In a significant move to advance the passenger experience, United Airlines (NASDAQ:UAL) entered into a groundbreaking agreement in September with SpaceX to provide Starlink’s high-speed Wi-Fi service on its aircraft.
The partnership represents the largest deal of its kind in the aviation industry, which will allow it to offer fast, reliable internet connectivity to its travelers at no cost. The new service will allow passengers to access live TV, streaming, social media, shopping, and gaming during flights, transforming the inflight experience.
With plans to equip over 1,000 aircraft with Starlink connectivity, the company is set to lead the industry in providing unparalleled inflight internet access. Testing is expected to begin in early 2025, with the first passenger flights featuring Starlink service later that year.
According to our database, 56 hedge funds held stakes in United Airlines (NASDAQ:UAL) in the second quarter, with positions worth $1.468 billion. PAR Capital Management is the biggest shareholder in the company and has a position worth $221.843 million as of Q2.
Overall UAL ranks 7th on our list of the cheap rising stocks to invest in. While we acknowledge the potential of UAL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure. None. This article was originally published on Insider Monkey.