We recently published a list of 10 Best Upside Stocks To Buy Right Now. In this article, we are going to take a look at where United Airlines Holdings Inc. (NASDAQ:UAL) stands against other best upside stocks to buy right now.
On March 8, Bob Elliott, Co-Founder, CEO, and CIO of Unlimited, and Kara Murphy, CIO of Kestra Investment Management, joined ‘Closing Bell Overtime’ on CNBC to talk about the week’s market action. In a discussion on whether stocks or gold were the better choice in the current economic climate, Bob Elliott noted that stocks were facing tough circumstances due to elevated expectations at the start of the year, which had begun to adjust downward. He highlighted concerns about fiscal tightening, tariff volatility, and weaker employment conditions. However, he emphasized that these factors were overshadowed by potential tax policy changes, immigration restrictions, and efforts to curb federal spending, which could impact nominal GDP growth. Kara Murphy was asked about diversification, which is a topic that gained traction after a prolonged period where mega-caps and tech stocks dominated returns. She pointed out that diversification had been undervalued for two years but was now proving its worth as bonds and international funds outperformed US stocks. Murphy suggested that a diversified portfolio was essential for navigating the market, as it was no longer reliant on just a few high-performing stocks.
The conversation then turned to the push-and-pull between monetary and fiscal policies. Elliott discussed the volatility caused by rapid changes in policy, such as tariffs, which made it difficult for investors to have high conviction in any direction. This volatility was forcing professional money managers to reduce risk, which led to a decrease in long positions in leveraged investments and a reduction in short interest positions. Elliott highlighted the challenge of finding incremental buyers for risk assets in such an uncertain environment. Murphy reflected on the market’s valuation at the start of the year, and noted that while valuations were high, they alone were not a reliable timing indicator for market corrections. She emphasized that earnings momentum would be crucial in the second half of the year, with a potential shift in relative strength from the MAG7 stocks to other parts of the market. Murphy cautioned that high expectations meant companies needed to continue meeting those expectations to sustain market performance.
As the discussion underscored the complexities and uncertainties of the current market environment, it emphasized the importance of diversification in investment strategies.
Methodology
We first sifted through stock screeners, online rankings, and internet lists to compile a list of the best stocks with analysts’ upside potentials over 50%, as of March 10. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is United Airlines Holdings Inc. (UAL) The Best Upside Stock To Buy Right Now?
A bird's eye view of a large commercial jetliner taking off from an airport runway.
United Airlines Holdings Inc. (NASDAQ:UAL) is a global airline that delivers passenger and cargo transportation across a network that spans continents. Beyond its core flight operations, it provides essential services like ground handling, maintenance, and a frequent flyer program.
In Q4 2024, the company’s international flights were more profitable than its domestic flights. Pacific PRASM (Passenger Revenue per Available Seat Mile) increased 4.1% year-over-year, with a 31% increase in seat capacity to pre-pandemic levels. Atlantic PRASM rose 7.1% without additional seats. There was a 1.6% increase in TRASM (Total Revenue per Available Seat Mile) and a 6.2% increase in ASM (Available Seat Mile), which resulted in a 50.6% rise in operating income. Business and premium passenger revenues grew 16% and 10% respectively.
For 2025, the company projects to earn $11.50 to $13.50 per share, which will be an 8.3% to 27% increase over 2024’s $10.61. This year, the company will utilize smaller 737s for intra-Asian routes, use its Guam hub for US-Asia travel, and improve seat utilization on existing international flights.
Patient Capital Management is bullish on the company due to its strong performance, improved customer satisfaction, and growing market dominance. It stated the following regarding United Airlines Holdings Inc. (NASDAQ:UAL) in its Q4 2024 investor letter:
“United Airlines Holdings, Inc. (NASDAQ:UAL) had a strong fourth quarter, gaining 70.2% in the period. The company benefitted from continued strong demand that surprised the market as well as the initiation of a buyback program, the first since COVID. There continues to be strong travel demand from both retail and business travelers. According to the International Air Transport Association (IATA), global air passenger travel is still below the pre-COVID implied trend path despite reaching a new all-time high this year. United’s focus on the customer over the last few years has led to strong improvement in net promoter scores (NPS) which should continue to flow through the model via better TRASM (total revenue per available seat mile) and higher cash flows and earnings. As of today, United alone accounts for ~30% of the overall industry’s profits. We expect this market share to grow and be defensible as we transition to an environment where customer service becomes the differentiating factor, and scale provides unparalleled ability to reinvest in the customer experience.”
Overall, UAL ranks 7th on our list of best upside stocks to buy right now. While we acknowledge the growth potential of UAL as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
