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Why United Continental Is Poised to Pull Back

By Brian D. Pacampara, CFA - Apr 1, 2013 at 11:11AM

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Market-lagging returns could be written in this 1-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, airline operator United Continental Holdings (UAL 2.78%) has received an alarming one-star ranking.

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

United Continental facts

Headquarters (founded)

Chicago (1934)

Market Cap

$10.7 billion

Industry

Airlines

Trailing-12-Month Revenue

$37.2 billion

Management

Chairman/CEO Jeffery Smisek

Vice Chairman/Chief Revenue Officer James Compton

Return on Capital (average, past 3 years)

8.2%

Cash/Debt

$6.5 billion / $13.2 billion

Competitors

Delta Air Lines

Southwest Airlines

US Airways

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

On CAPS, 51% of the 790 members who have rated United Continental believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, gameguru, succinctly summed up the United Continental bear case for our community:

The recent run-up seems unsupported by fundamentals. Oil prices likely can and will go higher. TSA delays and FAA furloughs may reduce traffic. Recent weather problems will hurt traffic. Add to that, United is the only US carrier currently hampered by the Dreamliner's grounding.

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

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Stocks Mentioned

United Airlines Holdings, Inc. Stock Quote
United Airlines Holdings, Inc.
UAL
$44.76 (2.78%) $1.21

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