Why US Airways Is Poised to Pull Back


Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, airline operator US Airways has received an alarming one-star ranking.

With that in mind, let's take a closer look at US Airways, and see what CAPS investors are saying about the stock right now.

US Airwaysfacts

Headquarters (founded)

Tempe, Ariz. (1981)

Market Cap

$2.4 billion



Trailing-12-Month Revenue

$13.8 billion


Chairman/CEO William Parker (since 2005)

CFO Derek Kerr (since 2005)

Return on Capital (average, past 3 years)



$2.4 billion / $4.8 billion


Delta Air Lines

Southwest Airlines

United Continental Holdings

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 42% of the 802 members who have rated US Airways believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, Allstar13913, succinctly summed up the bear case for our community:

There is no way a merged American Airlines and US Airways is profitable in the near term. When United and Continental merged in 2010, they spent almost $3B and 2 years later the merger hasn't been [integrated] .

Additionally, US Airways will have to raise their wage scale to American Airlines, which will hurt profitability. While a merger would create a better network and might position US Airways to a better future, I doubt it will make money.

If you want market-topping returns, you need to protect yourself from any undue risk. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

The article Why US Airways Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Southwest Airlines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.