2 Airline Stocks You Just Might Want to Reconsider

Airline stocks were hit hard during the pandemic, but these two are ones to consider for a quick turnaround coupled with a long-term strategy.

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Airline stocks continue to suffer around the world from the pandemic, and it’s clear why. Even after bailouts, revenue dropped to quite literally zero, with planes grounded all over the world. So, unless you’re incredibly patient, it looks like it could be years before some of these stocks recover.

But that’s not the case for all airline stocks.

If you’re considering getting in on this industry once more, there are a few airline stocks I would consider. However, they’re not what you may think of when you think of the industry. Let’s take a look at two I would buy on the TSX today.

Onex

If you’re looking for diversification from your investments, I would consider Onex (TSX:ONEX) as a solid purchase when looking at airline stocks. That’s because it’s not actually an airline stock at all! The company invested in WestJet a few years back. Unfortunately, it was just a few years before the pandemic hit.

However, this meant the company could rely on other sources of income to help WestJet and its other investments return to prominence. In fact, during its last earnings report, net earnings more than doubled from US$214 million to US$435 million. Earnings also showed that the company continued to have about US$7.9 billion of capital available for investment.

However, shares for Onex stock are still down by 17% in the last year alone. Yet since earnings came out, those shares have spiked, climbing 11% since coming out. This good news allowed analysts to increase their potential upside for the airline stock, believing there is a huge discount to be picked up — especially for those seeking a long-term investment.

Cargojet

Then there are airline stocks that don’t actually transport people at all! One of those airline stocks includes pandemic heavy-hitter Cargojet (TSX:CJT). Cargojet stock has risen significantly in the last few years after the company made several strong partnerships as well as provided supply-chain needs across Canada.

Cargojet stock remains the largest overnight cargo airline in the country. It’s made partnerships with some of the largest companies in the world with deals lasting for years. The company purchased further fleets of aircrafts as well and continues to add destinations for investors to consider.

Now earnings are coming up and investors should pick this company up beforehand. While it missed estimates during the last quarter, it’s likely to improve over the long term, as the company continues to create opportunities over and over again.

In fact, Cargojet stock is now down 36% in the last year alone. This is far lower than it should be, according to analysts, providing a major potential upside. In fact, should investors see shares rise to all-time highs once more, that would be a potential upside of 85% as of writing.

Bottom line

Just because many airline stocks are suffering doesn’t mean all of them are. There are so many opportunities to be had right now with the market down. Two of those opportunities are with these airline stocks on the TSX today — especially if you’re a long-term investor looking for a steal.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Cargojet. The Motley Fool has positions in and recommends Cargojet. The Motley Fool has a disclosure policy.

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