It is often the case that specialist players can carve out a profitable niche in a market. Our largest regionally-focused airline, Regional Express, may be the best of a bad bunch, but may also be a really interesting opportunity. Profitable in each of the last five years, Rex also delivers reasonable (and comparatively very impressive) returns on capital and shareholders equity.
However, Rex looks potentially quite attractive. With its share price around two-thirds of book value, Rex trading on a price/earnings ratio of less than 6, and is sporting an 8 per cent fully-franked dividend yield.
As long as management can restrict the slow but steady profit decline (or better yet start to deliver profit growth), the smallest of our trio may well deliver investors a soaring return.
One cheap airline stock ready to fly