Aloha mofos!

My pick for Q2 is Hawaiian Holdings (HA) - who's principal business it's ownership of Hawaiian Airlines.

You might be wondering.. "why buy into airlines right now?" "didn't this guy say buying JetBlue was an awful idea 6 months ago?" Well my answer is simple... Hawaiian is one of the only profitable airlines operating.. and not just barely profitable like Southwest and JetBlue who average a few cents per share in profits -- Hawaiian Holdings reported a staggering $2.23 per share profit in 2009 in a down year! The only other airline I have found in that ballpark is Alaska Air, a similarly sized airline trading at a steep $41+ per share or about 12 times earnings. To contrast - HA trades at only about 3 times earnings, indicating it is under priced and ready for a bump.

Hawaiian Air execs are hungry for growth, with expansion hopes to Asia in 2010 and beyond -- they are looking for ways to cut costs and becoming a bigger player in the international stage. here is a quote from the CEO -

Dunkerley acknowledged he is constantly reordering a "wish list" of future destinations for the airline, but is keeping his eyes primarily along the Asian-Pacific Rim, which has the greatest potential for fast growth.

"We are planning for the future," he said. "Having been able to earn profits throughout this recessionary period, we've been able to stay on our long-term growth and development path, [while] our competitors have had to take a fairly substantial number of routes off the map." more on this article here.

With the recent chatter of Airline mergers we will be seeing many airlines getting a boost in confidence from investors, and I think this is a great value stock for a profitable airline with an appetite for growth (and the cash to fuel it).

See you guys on Sunday