Updates on four stocks I've been keeping an eye on; Adding Sirius XM to my list of stocks to take a closer look at

Today, I'll cover some new developments with various stocks I've been writing about recently...

1) Up first, shares of ultra-low-cost carrier Spirit Airlines (SAVE), after declining 91% this year, soared 53% yesterday on news that the company has staved off a bankruptcy filing for two more months.

This Bloomberg article (via Yahoo Finance) from yesterday has more details: Spirit Airlines Jumps the Most Ever on Two-Month Debt Reprieve. Excerpt:

An agreement with US Bank National Association announced late Friday at least temporarily relieved the most immediate threat to Spirit, which has struggled since a federal judge in January blocked its planned acquisition by JetBlue Airways Corp. An engine part defect has grounded some of its planes and fares during the critical summer travel period were restrained by an oversupply of capacity across the industry.

Spirit now has until Dec. 23 to extend or refinance its 2025 bonds to maintain its credit-card processing agreement with the bank. The beleaguered fare discounter previously was facing a Monday deadline. The carrier also said it borrowed all of the $300 million available under a revolving credit line.

I discussed my experience with the stock in my October 4 e-mail.

This article in Slate captures why, even if you don't like Spirit, you should be rooting for it to survive: It's the Most Hated Airline in America. You'll Miss It When It's Gone. Excerpt:

"Spirit is basically the only choice for lower-income Americans on routes," [William] McGee said. "For a lot of people, it's a question of whether or not you're gonna see your grandparents, or the grandparents are gonna see their grandkids. If Spirit's not there, then they're not going."

Even for the people who do shell out for the more expensive flight rather than Spirit, the benefit is still there. If you're traveling on a route Spirit also services, you can bet you saved money from the mere fact that it was an option.

As the author continues, he's "rooting for Spirit":

I hope a bankruptcy doesn't mean the end of those yellow-and-black planes next to haughty Delta and United jets. I hope any restructuring maintains the bad-mannered airline poking the others in the eye.

In fact, I'm planning another trip on Spirit soon – and I'm going to do it right next time. I'm going to fly with little, ask for nothing, sit in my crappy little seat, and admire the miracle of modern commercial flight. And if I need a ginger ale, or something stronger, to settle my nerves, I'm going to appreciate that this airline of less-than-stellar repute has made flying cheaper for me for years. I can afford to throw them a buck or two for a bag of pretzels.

2) Meanwhile, Southwest Airlines (LUV) – which I discussed in my e-mails on August 28, September 3, and September 12 – fell nearly 2% yesterday...

That was after reports emerged that activist investor Elliott Investment Management and the company are in settlement talks that would give Elliott representation on Southwest's board.

CNBC has more details in this article from over the weekend: Elliott, Southwest in early settlement talks for significant board representation, sources say. Excerpt:

The settlement talks are predicated on a deal that would give Elliott less than full board control, said the people [familiar with the matter], who asked not to be named because the negotiations are confidential. Southwest's board will drop to 12 members after Chairman Gary Kelly steps down next year, meaning Elliott would likely end up wither fewer than six selections.

I suspect the stock is down on investor concerns that a deal means Southwest won't get the full shake-up (including a new CEO) that it needs. I continue to think the stock is interesting, but not quite cheap enough to pound the table on it.

3) Beleaguered aircraft maker Boeing (BA) rose 3.1% after it reached a tentative deal with its striking machinists union. This recent Wall Street Journal article has more on the story: Boeing, Union Reach Wage Deal to End Strike. Excerpt:

The company is offering a 35% wage increase over four years in its latest proposal. That is up from its original offer of 25% that was overwhelmingly rejected by a union local representing machinists in the Pacific Northwest who build most of Boeing's jets.

The strike, which began on Sept. 13, has halted production of most of the company's airplanes and triggered a large round of layoffs...

The union plans to vote on the deal on Wednesday. Nearly 95% of workers voted to reject the last tentative deal, which the union's leaders recommended.

Boeing still faces huge challenges, however (as outlined in this recent WSJ article, Boeing's CEO Is Shrinking the Jet Maker to Stop Its Crisis From Spiraling)... so I continue to recommend avoiding the stock for reasons outlined in last Tuesday's e-mail.

4) I last looked at entertainment giant Disney (DIS) in my January 12 e-mail...

Back then, I concluded that "I think there's a good chance of an excellent outcome here." But I didn't pull the trigger to recommend the stock to subscribers of our flagship newsletter, Stansberry's Investment Advisory, in part because Disney's debt load (at the time, net debt stood at $37 billion) made me nervous.

Since that e-mail, the stock hasn't done much – rising 7%, which trails the S&P 500 Index's 22% jump:

Here are two recent articles about the company's leadership turmoil:

First, an in-depth story in the New York Times about how current CEO Bob Iger (who is stepping down next year) outmaneuvered former CEO Bob Chapek to return to power at the head of the company: The Palace Coup at the Magic Kingdom. It includes this interesting line:

For a company that bills its theme parks as the "Happiest Place on Earth," Disney's corporate headquarters have long been anything but – a hotbed of intrigue and power struggles. Chapek's former chief of staff told people the company's sixth-floor executive suite was a "snake pit."

And second, a brief blurb in yesterday's WSJ with more details on Iger stepping down next year: Disney to Name Bob Iger's Successor in Early 2026. Excerpt:

Disney said it would name Chief Executive Bob Iger's replacement in early 2026 and replace its board chairman, signaling to investors that the company is taking a fresh approach to succession after past turbulence.

The announcement Monday marked the first time the company had formally given a time frame for when it aims to name Iger's successor, a decision that will shape the entertainment giant's next chapter.

And as the article continues, a new board chairman is coming:

Disney said former Morgan Stanley CEO James Gorman, chair of its succession committee, would become board chairman on Jan. 2, succeeding former Nike CEO Mark Parker, who plans to resign.

Gorman's elevation to chair is a sign to some observers that Disney wants to give more authority to an outsider with a strong record in high-stakes succession planning. Disney's board has been criticized in the past for succession-planning failures, while Gorman was praised for navigating Morgan Stanley through its successful CEO search.

I'll be keeping an eye on Disney to see if a leadership change gets the company moving in a stronger direction.

5) Finally, Berkshire Hathaway (BRK-B) investment manager Ted Weschler has been scooping up the beaten-down shares of satellite radio company Sirius XM (SIRI). This article in Barron's over the weekend has more details: Berkshire Buys Another Chunk of Sirius XM Stock. Its Stake Hits 32%. Excerpt:

Berkshire bought the stock on Wednesday through Friday at an average price of about $27 per share and now holds 110.3 million shares worth about $3 billion, according to a Form 4 filing with the Securities and Exchange Commission late Friday.

Berkshire now holds 32% of Sirius XM, which has more than 30 million self-paid subscribers to its service, which is delivered mainly in cars.

Considering this new development, I've added Sirius to my list of stocks to at least take a "first look" at... so stay tuned!

Best regards,

Whitney

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