Sunday, February 24, 2013

Why United Continental Is Poised to Plunge

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 (NYSE: UAL  ) has received the dreaded 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

$8.6 billion

Industry

Airlines

Trailing-12-Month Revenue

$37.2 billion

Management

Chairman/CEO Jeffery Smisek
Vice Chairman/Chief Revenue Officer James Compton

Return on Equity (Average, Past 3 Years)

8.1%

Cash/Debt

$6.7 billion / $12.2 billion

Competitors

Delta Air Lines (NYSE: DAL  )
Southwest Airlines (NYSE: LUV  )
US Airways (NYSE: LCC  )

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

On CAPS, 51% of the 783 members who have rated United Continental believe the stock will underperform the S&P 500 going forward.

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

This is the classic airline stock right now. Heavy CapEx, low profitability, labor union problems that can only be solved by throwing lots of money at workers, etc. I think [United Continental] will continue to disappoint for the next few quarters.

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