Should You Buy The Dip In Alaska Air Stock?

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ALK
Alaska Air

The shares of Alaska Air Group (NYSE: ALK) have lost 20% in value since mid-April largely due to skyrocketing inflation and the Fed’s counter measure of 50bps hike in funds rate – triggering concerns of a slowdown in discretionary spending. As highlighted in our earlier article, Fuel Hedges To Assist Alaska Air Group’s Earnings In 2022, the company’s hedge position on 50% of the expected fuel requirement for H1 2022 is likely to support the bottom line. In Q1, hedges lowered the company’s fuel cost from $2.91/gallon to $2/gallon. Moreover, strong passenger numbers at TSA checkpoints are a positive indicator for the top line. Per the Trefis machine learning engine which analyzes historical stock price movements, ALK stock has a 51% chance of a rise over the next month (21 trading days). See our analysis Alaska Air Stock Chance of Rise for more details.

Five Days: ALK -2.2%, vs. S&P 500 0.4%; Underperformed market (27% event probability)

  • ALK stock declined 2.2% over a five-day trading period ending 5/16/2022, compared to the broader market (S&P500) which remained fairly stable.
  • Returns of -2.2% or lower over a five-day period on 690 occasions out of 2516 (27%); Stock rose in the next five days in 345 of these 690 instances (50%).
Relevant Articles
  1. Fuel Hedges To Assist Alaska Air Group’s Earnings In 2022
  2. Alaska Airlines Stock Supported By Strong Fundamentals
  3. Alaska Air Group Stock Poised For Long-Term Gains?
  4. Company Of The Day: Alaska Air Group
  5. Should You Pick Alaska Airlines Stock Post Earnings?
  6. Forecast Of The Day: Alaska Airlines’ Average Occupancy Rate

Ten Days: ALK -13%, vs. S&P 500 -3.5%; Underperformed market (3% event probability)

  • ALK stock lost 13% over the last ten trading days (two weeks), compared to the broader market (S&P500) which declined 3.5%.
  • Returns of -13% or lower over a 10-day period on 80 occasions out of 2516 (3%); Stock rose in the next 10 days in 39 of these 80 instances (49%).

Twenty-One Days: ALK -19%, vs. S&P 500 -8.6%; Underperformed market (2% event probability)

  • ALK stock lost 19% over the last twenty-one trading days (about one month), compared to the broader market (S&P500) which declined 8.6%.
  • Returns of -19% or lower over a 21-day period on 49 occasions out of 2516 (2%); Stock rose in the next 21 days in 25 of these 49 instances (51%).

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns May 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 ALK Return -16% -12% -49%
 S&P 500 Return -3% -16% 79%
 Trefis Multi-Strategy Portfolio -6% -22% 211%

[1] Month-to-date and year-to-date as of 5/17/2022
[2] Cumulative total returns since the end of 2016

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