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 Airways facts

  

Headquarters (founded)

Tempe, Ariz. (1981)

Market Cap

$2.4 billion

Industry

Airlines

Trailing-12-Month Revenue

$13.8 billion

Management

Chairman/CEO William Parker (since 2005)

CFO Derek Kerr (since 2005)

Return on Capital (average, past 3 years)

9.4%

Cash/Debt

$2.4 billion / $4.8 billion

Competitors

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.

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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.

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