Jets Soaring; Stock Thru Roof!


Better get one airline on your radar. The company - and the stock – could be preparing for takeoff.

We're talking about JetBlue . The airline posted a first quarter profit that beat expectations earning $12 million, or 5 cents per share, compared with a loss of $10 million, or 5 cents per share a year earlier.

That’s impressive because the first-quarter is typically a seasonally weak period for airlines. In fact, it was the first time JetBlue made a profit in the first three months of the year since 2005.

But that’s not all. JetBlue was also able to navigate its way through the extreme turbulence generated by oil prices.

Jet Blue paid 31 percent less for fuel in the period than it did a year ago. The carrier restructured its fuel hedges last year so it wasn't tied to as many contracts this year as fuel got cheaper.

Of course, it’s not going to be a smooth ride entirely. Margins could suffer.

Chief Executive Dave Barger says he will "aggressively defend" the airline against growing low-cost competition and will offer fares starting at $39 — $10 cheaper than rival SouthWest.

Although that could eat into profits, the company expects to cut costs further this year to hold up its bottom line.

And Barger tells Fast Money “This year we’re looking at $475 million less in terms of fuel expense and our value proposition is a good place to be. So when you mix that revenue model with less fuel – (I think) 11% operating margins are do-able."

What’s the trade?

They have one of the smallest short interest in the airline space, explains Guy Adami. If they can get to 11% operating margins I think it’s a buy.

If I was going to jump into any of the airlines it would be this one, says Pete Najarian.

I don’t think it’s a trade, adds Jeff Macke, but their customers are very loyal. It’s probably worth a look as a long term investment.

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Trader disclosure: On Apr 23rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Macke Owns (SDS), (AGN), (WYNN), (GE), (LVS), (IMAX); Seymour Is Short (AAPL); Seymour's Firm Is Short (POT); Seymour Owns (BAC), (EEM), (TCK); Najarian Owns (AMZN) Calls; Najarian Owns (BX) Call Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MCD) & (MCD) Calls; Najarian Owns (MS) & (MS) Calls; Najarian Owns (PALM); Najarian Owns (RIO) Calls; Najarian Owns (XHB) Cal Spread; Najarian Owns (XLB) Call Spread with wires