1 Overlooked (but Important) Reason You Might Want to Avoid Spirit Airlines Stock
The easily offended may be ill-suited to own Spirit Airlines stock, Fool contributor Tim Beyers says in the following video.
Recently, the cut-rate carrier published in ad which claimed executives were "not smoking crack" by pitching $29.90 one-way fares to Toronto and the surrounding region. What makes the ad special, Tim says, is the accompanying silhouette resembling embattled Toronto mayor Rob Ford, who has come under fire for drug abuse allegations.
Seamy? No doubt. Clever? Absolutely. Spirit has no problem cashing in on the worst sort of news stories in order to sell seats. Heck, flight attendants wear ads. Nothing is off limits. "We are actively marketing other surfaces such as napkins, plane exteriors and overhead bins. The customer can benefit from this kind of brand advertising as it [offsets] costs and [keeps] airfares low," CEO Ben Baldanza said in a recent interview with the Orlando Sun-Sentinel newspaper.
The strategy works, too: Spirit's profit doubled as revenue increased more than 33% in the most recent quarter. Yet investors shouldn't rush into this this growth stock. Sure, there's plenty of opportunity to be had, but strong emotions have a way of clouding good investing judgment. Placing a real-money bet on a company whose marketing or sales tactics you fervently disagree with could cause you to act rashly. And acting rashly too often leads to losses, Tim says.
Now it's your turn to weigh in. Are you OK with Spirit's marketing and advertising strategy? Do you own the stock? Please watch the video to get Tim's full take and then leave a comment to let us know where you stand.
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The article 1 Overlooked (but Important) Reason You Might Want to Avoid Spirit Airlines Stock originally appeared on Fool.com.Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.The Motley Fool has no position in any of the stocks mentioned. 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.
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