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Primecap Can Ride Out Its Airline Stocks' Turbulence

The firm has been here before.

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Editor’s note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.

The coronavirus’ economic fallout has hit investors in airline stocks especially hard, perhaps none more so than Pasadena-based Primecap Management Company. At year-end 2019, Primecap firmwide owned 14% to 16% of the shares outstanding in three different airlines and stakes in nine other air carriers. As Exhibit 1 shows, shares of each of these airlines shed between 40.7% and 76.1% during the depths of this still-unfolding bear market (Feb. 20, 2020, to March 23, 2020), versus a 33.8% drop for the S&P 500 index.

Alec Lucas has a position in the following securities mentioned above: POAGX, PFE. Find out about Morningstar’s editorial policies.