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An Investor’s Guide to Spirit Airlines: November 2016 Recap

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Part 5
An Investor’s Guide to Spirit Airlines: November 2016 Recap PART 5 OF 5

How Did Spirit Airlines Stock Respond to Its November Performance?

Spirit Airlines stock

Since Spirit Airlines’s (SAVE) traffic release on December 8, 2016, the stock has risen 0.05%. Most the other airlines have also gained value during the same period. United Continental (UAL) rose 3.3%, followed by Alaska Air Group (ALK), which rose 3.1%.

JetBlue Airways (JBLU) rose 1.7% and Southwest Airlines (LUV) rose 1.2%. Allegiant Travels (ALGT) rose 0.33% during the same period. Delta Air Lines (DAL) saw the biggest loss, falling almost 2.4%, followed by American Airlines (AAL) with a fall of 0.35% during the same period.

How Did Spirit Airlines Stock Respond to Its November Performance?

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Year-to-date performance

Until October 2016, all airlines were trading in the red. That changed in November 2016, as activist investor and long-term airline bear Warren Buffett invested in airlines.

While most airlines continue to trade in green year-to-date through December 23, 2016, Delta Air Lines and JetBlue Airways continue to be in the red zone. JBLU has lost almost 1.7% YTD (year-to-date) and Delta Air Lines has lost 1.6% YTD. This is still a huge improvement compared to the 25%–30% loss both stocks reported until October.

Other airlines have gained year-to-date 2016. Spirit Airlines (SAVE) tops the charts with a rise of 47.5%, followed by United Continental, which rose 30.5%. Southwest Airlines rose 17.1%, American Airlines rose 14.5%, Alaska Air Group rose 14.5%, and ALGT rose 0.5% year-to-date.

Industry performance

After a volatile start, the markets have performed quite well in 2016. The broader market, tracked by the SPDR S&P 500 ETF (SPY), has risen 10.7% year-to-date.

Economic growth is a major factor impacting airline industry demand and as a result, the industry has closely tracked the market. Year-to-date through December 23, 2016, the Dow Jones US Airline Index (DJUSAR) has risen 11.8%.

As air travel is a discretionary budget item, we can also compare the industry’s performance to the consumer discretionary sector. The Consumer Discretionary SPDR ETF (XLY) has risen 5.5% year-to-date.

Please visit the Market Realist Airlines page for ongoing updates.

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