Like many airlines, Alaska Air (NYSE:ALK) just reported the best quarter in its history, thanks largely to low fuel prices. The company turns out margins and returns on capital that are consistently the best of the largest American carriers, while also owning the strongest balance sheet. To their credit, Alaska’s management has consistently rewarded shareholders without leveraging, and while maintaining a long-term outlook on their business. Finally, Alaska’s operational performance is the best of the major carriers, according to the Bureau of Transportation Statistics. At a P/E of 14.4 and a forward P/E of 12, Alaska is cheap both relative to the market as a whole and to other large non-legacy airlines.
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