Most people would rather not sit in a cramped flying tube for hours on end. That goes tenfold during a once-in-a-century pandemic. Gogo Inc. (NASDAQ: GOGO) offers a comprehensive entertainment solution that improves its brand image and fosters repeat customers.
Specifically, bullish investors eyeball GOGO stock for 3 reasons: Enhanced passenger experience, connectivity across the supply chain (Gogo's system can warn pilots about real-time changes in inclement weather patterns) and comprehensive support services.
With gains of over 305% over the trailing 6 months, GOGO geared up to become one of the best stocks under $20. Follow our step-by-step guidelines on how you can become a Gogo investor.
- Pick a Brokerage
Many investors prefer the unparalleled convenience of online brokerages. Thanks to explosive popularity in this area, you now have an abundance of choices. Further, the accelerated competitiveness has forced most online brokerages to offer commission-free trading.
Make sure you review the fine print before making your selection. Some factors to consider include incentives for joining, account minimum thresholds and inactivity fees. Some brokerages offer "soft" benefits, such as free educational material.
Finally, check the reputation of your target online brokerages. When you're dealing with money, peace of mind on the administrative and security front justifies its own premium. - Decide How Many Shares You Want
Next, you'll want to decide how many shares of GOGO stock you wish to purchase. Mathematically, the dollar-to-share count conversion is straightforward. Take the dollar amount you wish to purchase and divide that by the price of the stock in question.
For instance, let’s say GOGO stock is $13.13. If you want to invest $1,000, you end up purchasing 76 whole shares ($1,000/$13.13 = 76.16), assuming no commissions or fees. Depending on the brokerage, you may be able to purchase fractional shares if you desire.
However, your investment strategy and risk tolerance will also determine how much you wish to purchase. Typically, analysts label opportunities like Gogo as contrarian plays — bets against the prevailing opinion of the target asset or underlying market segment.
While contrarian strategies can yield tremendous rewards, watch for volatility. You may wish to wager an amount that won't be devastating if your investment doesn’t pan out. - Choose Your Order Type
Unlike purchasing a product at a retailer, buying stocks involves a basic understanding of market terminology. Though it may seem intimidating at first, it's very much like learning how to ride a bicycle. Once you know how, you never forget.
Learn more about the terms you should know.
Bid
A bid represents the highest price that a buyer is willing to pay for a stock or commodity. The bid price is always lower than the ask.
Ask
In contrast, the ask is the lowest price that a seller is willing to accept for a stock or commodity. The ask is always higher than the bid.
Spread
Technically known as the bid-ask spread, this concept refers to the difference between the bid and ask price. The stock market features 2 parties — the market maker and the investor (you). You speculate that the price you pay for a stock will rise in value, whereas the market maker profits from what they pay for a stock versus the price they sell to you, known as the spread.
Limit Order
A limit order is a specific price that you wish to buy (or sell) a specific stock. The advantage is that you know your transaction terms. On the other hand, the disadvantage is that there’s no guarantee that your order requests will execute.
Market Order
A market order executes a trade at that particular market condition. If you're buying, you will automatically purchase at the ask price. If you're selling, you will sell at the bid price. The advantage is you have assurances that your order will be processed. The drawback is that you don’t know for sure at what price you will transact the deal.
Stop-Loss Order
Basically an emergency valve for your portfolio, a stop-loss order instructs your broker to sell a stock if it falls to a specified price. This limits your loss, which is useful for a volatile security. On the other hand, you will miss out on a bounce-back opportunity if the stock triggers the stop-loss order. Also, the stop-loss order executes at the market price, which is problematic if the stock opens in the next session at a far lower price than the prior day's closing price.
Stop-Limit Order
A stop-limit order is similar to a stop-loss order but with an added layer of specificity. When a stock falls below a predefined threshold, a stop-limit order "instructs" your brokerage to be ready to sell but only at a predetermined lowest price you are willing to accept. Stop limits prevent the drawbacks associated with stop losses. If a stock plummets, the stop-limit order won't execute. - Execute Your Trade
Executing a market order is the simplest process. You indicate whether you wish to buy or sell and hit the market order button. The brokerage takes care of the rest.
Limit orders are also simple but require some thought as to the transaction price. Remember that if you want your order to go through, you should choose a reasonable price.
Best Online Stock Brokers
Not sure where to begin your search? Whether you’re on the hunt for stocks under $20 or you only want to buy Gogo Inc., these beginner-friendly brokers can help you get started quickly.
- Best For:Active and Global TradersVIEW PROS & CONS:Securely through Interactive Brokers’ website
- Best For:Global Broker for Short SellingVIEW PROS & CONS:securely through TradeZero's website
GOGO Stock History
Perhaps the overriding characteristic of GOGO stock is unfortunate timing. When shares first went public, the airline industry was still recovering from the Great Recession. From December 2018 onward, GOGO was on a recovery trek until the pandemic disrupted it.
However, the ensuing skyrocketing of GOGO stock implies that the pandemic was only an acute, unnatural crisis. Without it, shares would likely have marched to where it is now, minus the drama. This implies Gogo’s fundamentals are strong; only the surrounding environment isn’t.
Pros to Buying GOGO Stock
Check out the pros to buying GOGO to help drive your decision:
- Excellent contrarian opportunity: Since many analysts are focusing on the pandemic, GOGO stock is flying under the radar.
- Necessary value-add for airlines: Although the travel industry is extremely troubled, its operators can’t just sit down and give up. Because of its potential to accrue loyalty-driven revenue, Gogo’s connectivity platform can command a premium.
- Still a discount: Compared to the highs that it saw shortly following its initial public offering, GOGO stock still trades at a discount.
Cons to Buying GOGO Stock
As with anything, you’ll find cons to buying GOGO:
- Airlines continue to struggle: Despite a conspicuous uptick in air travel demand relative to prior months, passenger volume is approximately 40% of pre-pandemic levels, a staggering loss.
- Consumer economy has changed: According to the U.S. Bureau of Economic Analysis, the personal saving rate is nearly 13%, confirming that Americans are far less likely to spend more than they need to.
- Loyalty may not matter: If the economy worsens from here on out, consumers may chase price, which hurts businesses that thrive on customer retention.
Consider All Angles Before You Buy GOGO
With the struggles that this country has endured, it’s easy to fall under the trappings of immediacy bias — present emotions seem much more acute than past emotional experiences.
Even so, it’s crucial to realize that the U.S. has overcome every challenge it faced. There’s no reason to believe that this crisis will be any different. Forward-looking investors may want to consider GOGO stock in anticipation of a return to the friendly skies.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.