I have had some clients ask me, what industry I think will benefit from the $600 rebate checks that are due to be sent out as part of the U.S. economic stimulus package. I think airlines will benefit, especially lower cost carriers like Southwest (NYSE: LUV) and Jet Blue (NASDAQ: JBLU).
The USA Today has an article about the kind of vacation you can have for $600. The article says: "With most Americans expecting to receive a tax rebate of up to $600 ($1,200 for married couples), there are plenty of ways to get the most vacation for your buck, say travel experts. Whether it's a cruise, a tropical paradise, or family travel, these trips can all be done for under $600 a person."
Because we aren't talking about flying around the world or across the Atlantic for that measure, trips to Las Vegas or Orlando, for example, will fit the family, and of course people need a way to get to these destinations, so that's how the airlines become interesting. Throw into the mix potentially stable or even lower fuel costs, and for investors looking for a way to play the "Rebate check" game, you may want to take a look at the airlines.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 4/2/08
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Reader Comments (Page 1 of 1)
4-02-2008 @ 5:03PM
Michael Schneider said...
Actually, about a week and a half ago I suggested (in our free Barrel View e-mailing at http://www.Barrelomoney.com) Southwest Airlines as a possible beneficiary of the rebate checks and noted that the travel industry should get some of the rebate money even though most analysts were focused on retailers. So I agree with this analysis-- but your readers will have to pay a little more for Southwest as it has moved higher. Today, Southwest reported some good numbers on load factor and other measures. The stock had been knocked down on high oil and the recent short term mechanic issue that made big headlines and is now plaguing other airlines. It was probably a very good time to buy Southwest but oil prices are headed higher again so we will see. Married couples with children should be getting a good bonus so for those who can afford to spend it travel is a good option.