SkyWest, Inc. (NASDAQ:SKYW)

CAPS Rating: 3 out of 5

Through its wholly-owned subsidiaries the Company operates a regional airlines offering scheduled passenger service with over 2,400 daily departures to 229 destinations in the United States, Canada, Mexico and the Caribbean.

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Member Avatar TMFGemHunter (58.60) Submitted: 8/7/2014 10:27:54 AM : Outperform Start Price: $8.41 SKYW Score: +0.48

Why am I picking a struggling, loss-making company in an industry undergoing secular decline to beat the market in the next 5 years? Good question! Ultimately, it's all about valuation, and SkyWest trades for about one-third of book value.

That doesn't matter if the company continues to bleed cash long-term, but management is taking the right steps to unwind its unprofitable operations (largely ExpressJet flights for United Express). The fleet of uneconomical 50-seat jets will shrink by more than 150 planes in the course of 6 quarters, whereas SkyWest is gradually adding 76-seat jets that are profitable to fly. By 2016, I expect the company to be solidly profitable again and producing very strong free cash flow. I'll wait 'til then.

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Member Avatar Junkyardhawg1985 (87.54) Submitted: 7/2/2014 10:51:40 AM : Outperform Start Price: $12.56 SKYW Score: -31.85

Skywest (SKYW) at $12.51/sh trades at less than half of net tangible assets and below an enterprise value to revenue ratio of 0.5. They have paid off several hundred million dollars of debt in the past four years while the stock price has not moved. This is significant for a company with a market cap of only $640 million.

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Member Avatar FNN31 (29.17) Submitted: 4/26/2014 6:53:28 AM : Outperform Start Price: $12.01 SKYW Score: -34.21

FCF Yield of more than 20% and well managed company

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Member Avatar TSIF (99.96) Submitted: 3/21/2014 3:13:09 PM : Outperform Start Price: $12.37 SKYW Score: -36.78

SkyWest is one of the few airlines down sharply this year. This could signal a bargain, or it could signal investors steering clear for reasons that didn't exist last year when this was $17. SkyWest stockholders have been taking a turbulant ride for years, with no consistant altitude on 20-30 swings several times each year.

I had been watching airlines due to the weather, and as an equal opportunity thumber, have them called in both directions. Sometimes sectors move as one, sometimes they don't.

Concerns seem to be the minisule pilot/staff pay they pay, but larger airlines have also cut personale expenses.
A bigger concern seems to be the size of the planes......even with "cheap" staff, 50 seater planes drink a lot of fuel and appear to be falling in favor. SykWest has about 500 of these jets.

Skywest as a whole remains profitable, despite the issues as all airlines in general are benefiting from fewer flights, fuller planes, and higher "up charges" to the travelling public. Of it's two business entities, Skywest is profitable, Express Jet is marginal, leaning toward losses. Contracts are not as lucrative with the big boys, and need reneotiated. Most planes are on leases, and returning them off lease could remove some of the smaller planes.

It's hard to seay if the 15,000 cancelled flights are already factored into SkyWest's share price. If it is, these are seasonal and share price should rebound. If not properly presented, the stock could lose more altitude when the costs are quantified.

Valuation on BANKS, BIOPHARMS, and AIRLINES can require differnet metrics than other companies. For example, airlines often trade below book value, but book value is difficult to discern with expensive equipment, leases, depreciation, etc. SkyWest is currently trading at half book value, leaving some margin. P/S should also be low for airlines, and the 0.20 sounds great, but has to be put into perspective. Margins in airlines are also typically weak.

Best metrics are, are they making money, are they paying down debt, if there is a dividend, is it historically solid.
The answer to all three of these is yes.

I don't make many long calls, I try to find things "depressed" and hope they don't "depress" me. SkyWest bears watching.

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Member Avatar adasand (67.55) Submitted: 1/20/2014 4:40:49 PM : Outperform Start Price: $14.49 SKYW Score: -48.21

The Airline industry have taken a huge hit in recent years, I think we have reached the bottom of this cycle. Given that the major airlines some what recovered during the last few months of 2013, I think that smaller airlines will catch up. In general, I think airlines are good for the next couple years, but Skywest is a depressed stock that could double in the coming years as its P/B is almost 0.5.

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Member Avatar Fool4SmallCaps (< 20) Submitted: 11/18/2013 4:01:21 PM : Outperform Start Price: $15.92 SKYW Score: -56.90

The only small-cap stock to appear on AAII's Piotroski screen, today.

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Member Avatar sigiam (30.45) Submitted: 6/15/2012 3:03:28 PM : Underperform Start Price: $6.47 SKYW Score: +14.06

I understand this company is an airline.

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Member Avatar johnnywitt (45.67) Submitted: 6/5/2012 2:15:13 PM : Outperform Start Price: $6.26 SKYW Score: -14.97

Well, I work for this outfit and they always seem to find a way to make money. I think its cheap right now, but unfortunately, I think it will go to near $5 for a bottom before it finally turns around. I was granted stock and I have kept it for the long haul.

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Member Avatar markoebert (< 20) Submitted: 7/1/2010 2:57:29 PM : Outperform Start Price: $11.36 SKYW Score: -118.53

This is a solid company with a very good track record. It has non-union pilots which is a plus to me.

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Member Avatar johnnykillz (26.62) Submitted: 5/29/2010 2:40:48 PM : Outperform Start Price: $13.74 SKYW Score: -121.84

As of end of FYE 09, this company had 721 million in cash and short term investments. Currently, on Memorial Day 2010, it trades at just an 820mm market cap. So for $100m more you get the whole entire airline! This is a margin of safety pick... At some point, economic trends will work in this company's favor and the stock price will reflect at minimum the book value of this company. But we must wait until the winds of change find the underside of SkyWest's wings. But at this price you can afford to wait awhile.

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Member Avatar hou71372 (< 20) Submitted: 4/7/2010 3:24:40 PM : Outperform Start Price: $13.45 SKYW Score: -105.13

Following Mr. Independent.
Debt to Equity 1.45x
Quick Ratio 2.59x
Current Ratio 2.79x
56.8% Gross Margin higher than 90% of peers
Increased traffic

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Member Avatar mrindependent (80.08) Submitted: 4/7/2010 3:11:30 PM : Outperform Start Price: $13.38 SKYW Score: -104.91

I am not generally a fan of airlines, but at the right price, I like any company. SkyWest currently qualifies for my "out of favor stocks" screen which looks for low forward p/e ratios, low p/bv ratios, low share prices and recent earnings disappointments. The screen has trounce the S&P 500 over the last decade. But if you are bearish on stocks you may want to pass on this pick because this stock screen tends to thrive in bull markets and performs in line with the market when the market is declining. Skywest is currently available for just 0.59 times book value and 8.4 times 2010 estimated earnings, which are at low ebb. Eventually, the news will turn in this company's favor for awhile and the price will likely soar past book value. This company maintains a gigantic cash stockpile and is currently earning money. Thus, there is no realistic risk of insolvency.

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Member Avatar megalong (< 20) Submitted: 2/14/2010 6:41:08 PM : Outperform Start Price: $14.21 SKYW Score: -122.44

SkyWest is the least leveraged US airline, with "only" $1.85B of debt. They are currently trading at .6x tangible book, 9.3x trailing earnings and 7x forward earnings. I believe their conservative fiscal approach will pay off over the next couple of years - when things get rough, they can grow and increase profitability on their own terms. The other regionals including RJET and PNCL also look like good deals but carry a bit heftier debt.

floridabuilder has always emphasized the importance of drawing distinctions, even in a troubled industry:
"If you are red thumbing NVR because you hate all builders red thumb away. If you are red thumbing NVR because you think the company is in trouble or is not run well.... you are barking up the wrong tree.

NVR is best in class in the industry. Don't bite into the only apple with a worm in it."

In my opinion a lot of people red thumbing regional airlines are making the same mistake.

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Member Avatar spreadsheetV1 (98.78) Submitted: 11/23/2009 1:32:11 AM : Outperform Start Price: $14.40 SKYW Score: -120.84

This met a high level screen to indicate a buy and strong outperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balnace sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
Testing capabilities of this 1st version of my automated, valuation spreadhseet matched with my personal criteria and see how it holds up.

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Member Avatar ayaghsizian (97.69) Submitted: 9/20/2009 1:34:43 AM : Outperform Start Price: $16.76 SKYW Score: -137.79

stock screener

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Member Avatar svande8952 (< 20) Submitted: 6/9/2009 12:56:29 PM : Underperform Start Price: $9.70 SKYW Score: +123.98

They are slated to lose the Midwest Express contract, this hurts the fundamental diversification of this company

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Member Avatar PilotJY (70.17) Submitted: 3/13/2009 1:08:59 AM : Outperform Start Price: $10.61 SKYW Score: -186.79

I love SkyWest Airlines, and I am sure everyone knows that the Airlines are not the best way to go, however, SkyWest Airlines, being a Commuter and Regional Airline, it will soar more so then the Majors.

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Member Avatar cfiblc (< 20) Submitted: 2/24/2009 9:43:51 AM : Outperform Start Price: $10.02 SKYW Score: -183.17

SKYW has a solid relationship with it's mainline partners. ASA has recently been awarded 10 900 series CRJ's. They have been proactive in cost reductions and have been profitable in the fourth quarter. Plenty of cash on hand.

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Member Avatar UpHighDownHard (< 20) Submitted: 10/10/2008 10:44:35 AM : Outperform Start Price: $11.12 SKYW Score: -154.30

Largest regional airline in the U.S. and now diversified into foreign markets. The airline passes fuel cost through to its major airlines via "cost plus" contracts but has been priced as an airline with direct fuel costs.

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Member Avatar biovestor (< 20) Submitted: 6/30/2008 12:57:22 PM : Underperform Start Price: $12.07 SKYW Score: +88.68

Part of my short airline Chapter 11 basket trade.

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