I hope you’re enjoying yesterday’s new Investment Digest issue. Here’s a strong new
idea from Ford Equity Research.
“Delta Air Lines (DAL $19 NYSE) provides scheduled air transportation for
passengers and cargo throughout the U.S. and around the world. We project that
Delta Air will strongly outperform the market over the next six to 12 months.
“[Delta’s] earnings strength is very positive. EPS increased from $2.01 to an
estimated $2.08 over the past five quarters, indicating an improving growth rate.
Analyst forecasts have recently been raised. The company recently reported better
than expected results.
“Ford’s earnings momentum measures the acceleration or deceleration in trailing
12 month operating earnings per share growth. The upward curvature of the
plotted points in the graph below indicates that while Delta’s [earnings] have shown
strong acceleration in quarterly growth rates when adjusted for the volatility of
earnings. This indicates an improvement in future earnings growth may occur.
“Relative valuation is very positive. Delta’s operating earnings yield of 11.6% ranks
above 95% of the other companies in the Ford universe of stocks, indicating that it is
undervalued.”
Richard Segarra, CFA, Ford Equity Research, www.fordequity.com,
800-842-0207, 5/3/13