One of the most beloved stocks on Wall Street has just surprised investors.
American Airlines, the S&P 500 stock with the most sales and low performance ratings, recorded a lower loss than expected in its last quarter. Shares experienced volatile fluctuations on Thursday, which rose more than 30% at one point. His high short interest caught the attention of Reddit marketers who have targeted troubled names like GameStop and AMC.
Unprecedented stocks like American Airlines could rise further this year, said Gina Sanchez, CEO of Chantico Global and chief market strategist at Lido Advisors.
“We are looking for a recovery. This recovery may take a while, but I think most investors are focused on that recovery and therefore investors are starting to look for opportunities to put their money into less-valued stocks that can benefit a recovery in a scenario of ups and downs of all ships, ”Sanchez told CNBC’s“ Trading Nation ”on Thursday.
American Airlines has been under pressure for the past year, as the coronavirus pandemic has hampered domestic and international travel. Shares have risen 119% since the May low, although it is still down 41% at the peak of February.
“If last year I had to be demanding and be very specific about where I wanted to expose myself, this coming year you could see the recovery helping broad sectors and this is where there is something really cheap like American Airlines or the industry. consumer discretion, such as a Bed Bath & Beyond … could benefit from a big boost for the whole industry, ”Sanchez said.
Bed, Bath & Beyond is also a very short stock with above average sales scores – its short interest of 63% has also attracted Reddit traders and caused a small squeeze. Shares have risen 89% this year as retail flows pushed short traders to hedge their positions.
Katie Stockton, founder of Fairlead Strategies, agrees that American Airlines ’rise was driven by revenue and retail participation. She sees this breakup continuing and is not the only company with a high number of sales valuations that she is supporting.
“Another example of unappreciated stocks on Wall Street is Western Union … and that generates profits for that same relatively oversold state,” Stockton said during the same interview. “It also has a somewhat sideways price action, a range-limited setup that would be perfect for an outbreak with resistance almost in line with current levels. So I think that was the kind of setup that was favored. during this season of earnings “.
Western Union, whose earnings report is expected on February 9, has delayed the market rebound: it has bounced 32% from the April low, but remains 19% below the February high. The stock has six street selling scores.
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