Head for the hills part II: Something wicked this way comes

Delta Air Lines (DAL)

It’s a triple whammy for airlines. Not only do they face rising fuel costs (20% in 2017, and a forecast 30% in 2018), but they also tend to hold a large amount of debt, which means they will face significant rises in two completely unavoidable expenses. Add in slowly sinking global economic growth and it’s easy to see why wise investors should give these companies a wide berth. As it happens, Delta Air Lines owns its own refinery, but that will have only a small off-setting effect on its fuel costs. Most discouragingly, Delta has one of the worst current ratios (the ratio of assets to debt) of any airline, with a dismal 0.39.

Chart courtesy of www.stockcharts.com

Julian Close

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

You May Also Like