The airline industry has been among the market leaders in the current bullish wave sweeping through the markets. The pandemic dealt badly with the sector, but the availability of the vaccine is now driving investors’ interest in the industry, which is exemplified by rising share prices. One of the companies positioned to benefit from this increased demand is easyJet, which is why this article is a guide for those hoping to invest in easyJet.
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Learn How to Buy easyJet Stocks in 3 Easy Steps
Find a broker
Finding a broker is the first step in the process of acquiring shares in any publicly traded stock on a stock exchange. There is an array of trading brokers out there, but not all of them may be suitable for you. Find a broker that appeals to your investment objectives and offers the best features.
Analyze the easyJet stock price chart
While fundamental analysis tells about the company’s value, technical analysis shows what the market thinks of the stock. By analyzing the stock’s price charts with a combination of technical indicators, you can determine at what level would be appropriate for entering or exiting a trade. So, endeavor to analyze the stock using the price chart.
After you have outlined your investing strategy and funded your account, you can start trading. You can trade either at market price or use a limit order. Always ensure that you have a proper risk management strategy in place before executing a trade.
easyJet company overview
easyJet is a low-cost air carrier established in 1995 as part of the EasyGroup conglomerate. The company, in combination with its two subsidiary airlines (easyJet Switzerland and easyJet Europe), operates an extensive network of low-cost services in about 156 airports across 33 countries. As of September 30, 2020, the company operated 981 routes and a fleet of 342 aircraft. easyJet plc is headquartered in Luton, the United Kingdom.
EasyJet business model and revenue streams
easyjet operates a business model focused on low cost. Its cost differentiation strategy has given it a source of sustainable competitive advantage over other airlines. The company has two main streams of revenue: fares and ancillary services. Close to 80% of the company’s revenue is generated through airfares.
Ancillary services refer to those services which the airline provides to passengers beyond air travel. This segment, which contributes about 21.5% of the company’s revenue, includes non-flight scheduled services, internet-related services, and the in-flight sale of beverages, food, and merchandise. The segment has also been growing rapidly as the company devises more ways to make money from customers apart from airfares.
Ancillary revenue increased 26% to $719m, contributing to 20.8% of total revenue in the 2019 fiscal year.
History of easyJet
easyJet plc was established in 1995 by Greek-Cypriot Stelios Haji-Ioannou, who gained an interest in the aviation business after being approached as a potential investor in Virgin Atlantic's Greek franchisee. The company operates primarily as an airline operating in Europe but also leases aircraft, organizes tours, and provides financing services. easyJet has a total of 342 aircraft in its fleet plying 981 routes. The airline is famed for its no-frills approach, which eliminates unnecessary services, allowing it to offer its flights at low costs to travelers.
True to its no-frills approach, the company, from the onset, always try to reduce operating costs by all means. It initially did not own any aircraft but operated a pair of wet-leased Boeing 737-200 aircraft, which made industry watchers refer to easyJet as a 'paper airline'. To encourage the newly formed airline company, the management of Luton Airport allowed easyJet to use the 15,000 square feet building for free. The company also initiated a paperless concept which reduced the quantity of stationery the company used.
Despite its cash-strapped beginnings, easyJet has seen steady expansion since its establishment through a series of acquisitions and its cost leadership strategy which has muscled market share from big players in a highly competitive industry. In 2014, the airline became the second-largest budget airline in Europe by the number of passengers carried, behind Ryanair — another airline with a no-frills approach.
This attracted attention from the big players worried that easyJet was taking a chunk of their market share. In response, one of its direct competitors, KLM, engaged in a predatory pricing strategy. This culminated in a European Union-led investigation over unfair competitive practices. In November 2004, easyJet plc got listed on the London Stock Exchange, and subsequently, the company got quoted on the US OTC market in October 2009.
Brokers that offer easyJet shares
You can buy easyJet shares at any time by visiting the website of any reputable brokers. Interestingly, we have compiled a list of the best brokers offering easyJet shares.
Should I invest in easyJet stock?
Yes, you can invest in easyJet stock because the availability of the coronavirus vaccine has made the sector a hot cake, and easyJet is one of the stocks to benefit from the high demands for airline stocks.
EasyJet stock investment potential
Investing in easyJet should be restricted to short-term play. Despite the current rotation into value stocks, airline stocks could be standing naked when the frost clears. easyJet is currently in debt to the tune of about $2bn. Also, there is no assurance that the airline would be operating at full capacity for this year at least. Rising oil prices may also mean that airlines would have more operating expenses amidst dwindling revenues. However, the stock is primely positioned to benefit from the current situation in the stock market.
What kinds of investors should include easyJet stock in their portfolios?
At the moment, easyJet is traded over the counter in the United States. Plus, the stock is currently benefiting from the reopening play in the market. The company also has a huge debt profile like other airline companies. These factors make easyJet a stock for short-term play. The fundamentals imply that when the enthusiasm surrounding the rotation into value stocks clears off, investors would go back to quarterly reports and valuations to make investment decisions. Also, trading in OTC stocks carries a higher risk because of less regulation. As such, investing in easyJet is majorly a short-term play, which should be left for experienced day traders, swing traders, and investors with a huge risk appetite.
How much should I invest in easyJet?
The amount one should invest in a stock differs. However, seasoned traders and investors emphasize the need to use only 2% of your portfolio on a single stock. This risk management strategy is highly recommended for potential investors.
How to buy shares in easyJet stock?
Open a brokerage account
The process of buying OTC stocks is relatively easy. Because they trade just like most other stocks, you can buy and sell OTC stocks through most major online brokers. To buy shares of an OTC stock, you'll need to know the company's ticker symbol and have enough money in your brokerage account to buy the desired number of shares.
Determine how much you want to invest
How much you want to invest depends on a variety of factors, such as cash at your disposal, knowledge of stock, and your investment timeframe. It is expedient not to risk more than 2% of your portfolio on a single stock.
Place your order
Now, navigate to the broker’s stock page and search for easyJet’s ticker symbol (OTC: ESYJY) to see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to buy and place your order.
Once you have placed your order, your broker will automatically execute it for you and your easyJet shares will be listed in your account. But since it is a short-term play, you need to monitor your trade to know when to exit from the trade. It is preferable to place stop loss and take profit orders so as not to be taken unawares.
Buy easyJet shares using a broker
Shares of easyJet are traded OTC. Since the OTC market has a somewhat dark shadow hanging over its reputation, the need for using efficient and reliable brokers to execute trades cannot be overstated. To buy shares of easyJet, you would need an account with a broker or platform that offers OTC stocks.
Buy easyJet shares with a direct stock purchase plan (DSPP)
Unfortunately, shares of easyJet are not offered directly through direct stock purchase. In the United States, they are only traded in the OTC market.
Frequently Asked Questions
The rotation play in the market in 2021 makes easyJet a good stock for short-term trading at the moment.
easyJet was profitable in the years leading to the pandemic. However, the company posted a loss last year
Yes, you can make money trading easyJet stock
There is no best platform to trade easyJet stocks.
The trading hours of easyJet are between the hours of 9:30 AM to 4:00 PM New York time. However, market participants are free to quote and trade at any time as long as they comply with current regulations.
EasyJet is listed on the OTC market