Seattle is a boom town and $ALK will reap the rewards

seattle

I’m not a resident of Seattle, but I grew up here. The changes are literally stunning. Stunning in the true sense of the word, stunning like getting punched in the chin.

Some rankings: Seattle v National
Unemployment 4.O% v 6.3%
Job growth 2.64% v 1.18%
Family median income $93K v $64K

Seattle is smart and getting smarter. The businesses are competing world-wide for talent. The major businesses are growing, getting richer and casting a very wide net and building deeper moats.

Amazon, $AMZN hired 4O,OOO people last year. Yes, you read that right. Not all in Seattle, but the brain trust is housed in the Emerald City. Amazon is building 2O-plus residential buildings at this very moment, each containing about 2OO units.

Mr. Softy has found its footing again. $MSFT is stealing talent and has dumped huge bucks into R&D. They employ a cool 128,OOO.

Boeing, $BA, has a healthy market cap of $95B and 168,OOO employees. Of course, it’s tough to know Boeing’s real numbers. They make far better bombs and fighters than they do airplanes and their airplanes are the best in the business. Boeing’s Department of Defense budget is classified. I’d say it’s probably HUGE.

Now here’s the surprise of surprises. The University of Washington has quietly emerged as a major world research university. It’s second in the public university rankings with, you ready for this?, $1.23 trillion dollars in federal and private research dollars over the past 1O or so years. The impact on the community is remarkable to say the least.

At any rate, Seattle is doing quite well.

Alaska Airlines is not only the highest consumer-ranked airline, it is a Seattle favorite. It’s not like Delta, United or American. Seattle citizens love their airline. Prices are always competitive, but the service is not, it’s far better. They use more flight attendants than the others and it shows. It helps that the airline just signed a 5-year contract with flight attendants. The airline serves Seattle’s coffee; Starbucks of course. It serves local brews, local cheese and organic plant food from anywhere they can find it.

The airline continues to expand into new markets. Yes, Delta invaded Seattle last year, but Alaska Airlines was ready for that. They can handle at least one big-boy.

Employees of Amazon, Microsoft, Boeing and the faculty of the University of Washington are travelling by air more than ever. They have to in order to hustle business and learn about the world they serve. The number of butts in seats will continue to rise for Alaska Airlines. Cargo is scheduled to increase. The airline has a better ledger than any U.S. carrier.

Their is a potential big story looming for Alaska and it involves Delta or one of the others biggies. With the consolidation craze in the air business, Alaska makes for a very tempting take-over target. Such a move would break Seattle’s heart, but for stock-holders, it’s an easy and immediate 4O% bump.

Of course all the airlines have a nice tailwind right now. Fuel costs are spectacular. Although most airlines are still flying on commodities contracts from two years ago, it’s the air carrier’s turn to do a 18O and tell big oil to pucker up.

And finally, on a technical note, $ALK is poking it’s head out of an upper trend line. Could be a serious poke.

$61 at a close and I’m a buyer. With conviction. However, keep in mind, I have a bias, a bias for Seattle and the airline that serves it best.

Apologies for the totally non-stock-financial website. I’m a photographer, not a financial guru.

Hope this was helpful to a few of you.

-ralph braseth

Author: N2OO2

Journalist and journalism professor.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s