I just did a meticulous empirical analysis on CO
's stock - ouch! When considering historical prices and using the security market line formula, CO
's stock is clearly overvalued - a definite "no-go". Also, it doesn't even take much analysis and use of formulas to realize how risky CO
's, and other airlines' stock is. Check out CO
's beta on Yahoo Finance - it is nearly 3.4!! Not the area in which I would choose as my foci for investments. Interesting to me, however, has been independence air (couldn't remember their symbol, is it ACA
?). I considered potential investment here (as far as airlines go, anyway), yet because the company hasn't been in existence for too long (as an 'independent', that is), it is difficult to ascertain its potential and to find an accurate required rate of return. It will be interesting to see what happens when the 320's start coming and the new routes out west begin.
-just some thoughts