UAL Corporation (NYSE:UAUA) - better known as United Airlines - moved up today on news that the company retained Goldman Sachs (NYSE:GS) to explore strategic alternatives. Those familiar with the situation say that the company is likely seeking a merger with Delta Airlines (DALRQ) or Continental Airlines (CAL). This news comes after UAL emerged from bankruptcy and the airline industry as a whole swung to a profit, with the help of lower fuel costs and more travellers. UAL enjoyed a share of this profit with strong performance last quarter; however, their stock remains one of the cheapest airline plays, trading at only 0.79x earnings (trailing). Any effort to unlock shareholder value could help this stock come to value at a significant premium to the current market price. Many traders are speculating that the company will require the help of a hedge fund or suitor in order to help it with any potential merger; therefore, a 13D and 8K filings would be the ones to watch as this situation unfolds.

Related Companies
Delta Airlines (DALRQ)
AMR Corporation (AMR)
Continental Airlines, Inc. (CAL)