‘Dirt cheap’ airline stocks: Analyst

A few airline stocks appear inexpensive, Wolfe Research industry analyst Hunter Keay said Wednesday.

"If you look at the chart, they look expensive," he said. "But when you look at Delta, US Airways, you know, United, they're trading at five times earnings. They're trading at four times enterprise value to EBITDA. I mean, these are not expensive."

(Read more: 'Oracle of Tampa' shares top stock pick)

On CNBC's "Fast Money," Keay said that airline stock valuations were around 10 to 12 times earnings, which was not now the case.

"Even though there's been some speculative money that's driven them off a very low low, off the bottom, they're still dirt cheap relative to where they can be relative to where they can be," he added.

(Read more: Facebook earnings are just the beginning, pro says)

Keay noted the rise of fuel costs that went along with the airlines results and said that hedging fuel costs were contraindicated.

"I think hedging is an extreme waste of capital, waste of time, waste of money, and the only people that really benefit are Wall Street trading desks, not airlines nor their equity investments. I don't view a hedge book as an asset. I view a hedge book, frankly, as a liability," he said.

One airline was a winner, in part, because it avoided this practice, Keay added.

(Read more: Jeremy Siegel remains bullish on earnings growth for 2013)

"US Airways does not hedge their fuel, and that is, in our opinion, the best way to go about doing it for airlines," he said. "And today they just reported earnings and guided to the lowest fuel expense, once again, in the industry. So, the lack of a hedge book has given US Airways the ability to have the lowest fuel price per gallon in the industry in eight of the last 12 quarters."

Keay had "outperform" ratings on US Airways, with a $27 price target; United, with a $38 price target; and Delta Air Lines, with a $23 price target.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro. CNBC's Torrey Kleinman contributed research to this report.

Trader disclosure: On July 24, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long GOOG; Karen Finerman is long M; Karen Finerman is long TGT; Karen Finerman is long OCR; Karen Finerman is long MDY PUTS ; Dan Nathan is short BBRY 12/10 put spread; Dan Nathan is long BA Aug 9 put fly ; Dan Nathan is long TXN Aug 38/36 put spread; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami's wife, Linda Snow, works at Merck; Jon Najarian is long AAPL; Jon Najarian is long SBUX ; Jon Najarian is long CSCO; Jon Najarian is long FB; Jon Najarian is long EBAY; Jon Najarian is long QCOM; Jon Najarian is long EMC; Jon Najarian is long VMW; Jon Najarian is long NTAP; Jordan Rohan is long FB.