Diamonds and Dogs

9/27/18

Alaska Air (ALK) poised to soar. The airline industry has struggled this year due in part to worries about higher fuel costs, but Alaska Air is up 4% on an upgrade. The analyst believes Alaska's capacity discipline, along with its potentially industry-leading unit sales growth will boost profits and sales going forward. Alaska Air should see moderating capacity, easier comparisons, merger synergies, and higher sales from its loyalty program, along with the potential that it could raise luggage fees as many peers have done recent.

Bed Bath & Beyond (BBBY) going to the mattresses. The home goods retailer is down 21% to an 18 year low after missing earnings estimates and lowering guidance for the rest of the year. The company warned that the Chinese tariffs would raise costs. Longer term this thing called the Internet will make growing the business tough.  As the KeyBanc analyst mentioned, competition for Bed Bath & Beyond from both online and physical retailers is getting worse not better.