United Continental Still Undervalued – 10% Cashflow Yield + 11% Shareholder Yield

Johnny Hopkins(NYSE:UAL), Stocks Comments

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One of the cheapest stocks in our Large Cap 1000Stock Screener is United Continental Holdings Inc (NYSE:UAL).

United Continental Holdings, Inc., (United) together with its subsidiaries, provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa, and Latin America. The company transports people and cargo through its mainline and regional operations. As of December 31, 2015, United operated 1,236 aircraft. The company also sells fuel; and offers catering, ground handling, and maintenance services for third parties.

Airline stocks, including United, got a boost in late 2016 after it was revealed Berkshire Hathaway had added three of the biggest U.S. airlines to its third quarter portfolio. Stocks included — American Airlines Group Inc (NASDAQ:AAL), Delta Air Lines, Inc. (NYSE:DAL), and United Continental Holdings Inc (NYSE:UAL). According to the September filing, Berkshire owned 21.8 million American Airlines shares worth $797 million, 6.3 million Delta shares worth $249.3 million, and 4.5 million United shares worth $237.8 million. While there are a number of airline stocks in our Large Cap 1000Stock Screener, today I want to focus on United.

While the company’s recently announced full year 2016 revenues were down slightly compared to 2015, United is a company on a clear growth trajectory based on the strategic initiatives it announced back in November. These initiatives include the introduction of basic economy fares, optimizing its network, adjusting its aircraft order book, and ratifying new labor agreements. United is embarking on a rigorous cost and revenue management program and has embraced the use of mobile technology, with its award-winning mobile app, to better serve its customers as well as improving operational efficiencies for its employees. CEO Oscar Munoz has demonstrated his willingness to shake-up his senior leadership team in order to achieve his goal of making United an agile and innovative industry leader.

Get our full stock analysis on United at ValueWalk here.

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