This Could Be The Craziest (Or Smartest) Investment Ever
I monitor IPO filings on a daily basis. And this week, something strange caught my eye:
Sun Country Airlines, a low-cost air carrier, is planning to IPO in the coming months.
Are you kidding me?
A freaking airline company going public during the worst industry slowdown in history?
This is either the craziest investment opportunity ever… or the smartest.
Let me explain…
The Trend Is Not this IPO’s Friend
To set the stage here, let’s be clear about something:
The most important goal of any company’s IPO should be to maximize its valuation.
A higher valuation means less dilution. And for long-term investors (and for management, which hopefully has a meaningful ownership interest), less dilution means more profits.
Obviously, maximizing valuation is easier during boom times. After all, investors have no problem paying up for what’s working.
But during downturns? Not so much. I mean, who wants to put hard-earned capital into a cratering market?
And unfortunately, a cratering market is precisely what’s happening in the airline industry…
Despite an encouraging rebound off the lows, TSA foot traffic data reveals that the airline industry is still reeling.
So far in 2021, on average, over 1.1 million fewer people are flying each day.
Take a look…
Simply put, airline traffic is still down 60% year-over-year.
Admittedly, conditions were far worse at the height of the pandemic, as traffic dropped a staggering 96%. So, from that perspective, conditions are improving.
In addition, the market is a forward-looking beast, so investors understand that air travel will rebound eventually. But precisely when that’ll happen is still an unknown.
I recently saw a forecast that suggested it might not be until 2024!
Against this backdrop, there’s no way that Sun Country Airlines will maximize its IPO valuation.
And therein could lie a crazy contrarian opportunity for us…
You see, the stupidity of the company’s (and its banker’s) market timing could play to our advantage.
How? Simple: by serving us up a super-cheap entry point.
Ready for Takeoff?
I already told you about a conservative way to play an airline rebound:
Invest in the U.S. Global Jets ETF (JETS).
You’ll recall, JETS provides immediate exposure to a portfolio of 40 airline and airline-related stocks, thereby reducing our risk. And it charges a reasonable expense ratio of only 0.60%.
But what if we wanted a more speculative opportunity? For example, the chance to make triple-digit profits on an airline rebound?
Well, in that case, Sun Country Airlines could represent the perfect opportunity.
To find out for sure, in my next update, I’ll run the company through my proprietary IPO screen that I detailed for you last year.
So stay tuned!
Ahead of the tape,
Editor, Trend Trader Daily
Published by Crowdability
Louis Basenese is a professional investor, and one of the country’s leading technology analysts.
He’s spent the past 20 years analyzing emerging technologies, and developing a proven methodology to consistently profit from them.
Lou began his investment career at Morgan Stanley, where he was eventually tasked with directing over $1.5 billion in capital.
Based on his proven track record as a financial analyst and investor, Lou became a television commentator on Fox Business and CNBC, and a market expert in the pages of The Wall Street Journal and Business Insider. But ultimately, Lou found he preferred helping Main Street investors like you.
By providing ordinary investors with extraordinary research, he discovered that he can help his readers change their financial futures, and change their lives for the better. And that explains why he recently launched Trend Trader Daily.
With this new service, Lou can share his research with you on groundbreaking new technologies and emerging sectors — well before he shares this information with the general public on TV, the internet, or anywhere else.
So what’s one of Lou’s top recommendations for right now? Click here to see what he’s recommending you do to potentially grow your wealth in 2021 and beyond…