Shareholders in Air Arabia are two-time losers.
The stock was sold early last year as the price of oil soared, apparently in recognition that fuel accounts for much of an airline’s costs. But when oil dropped out of sight after that, Air Arabia sank even faster and farther as investors seemed to conclude that business prospects in the oil-dependent Middle East would suffer.
When sentiment toward a stock is so glum that all news is bad news, it’s time to take inventory of the ways the company might not be getting its due. There are plenty in the case of the low-cost airline – enough to persuade several investment advisers that it will not remain a low-cost stock for long.
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