Comments on: Best airline stocks http://www.intelligentspeculator.net/free_stock_picks/best-airline-stocks/ Free stock picks and stock market commentary. Sat, 11 Feb 2012 13:51:56 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Positroll http://www.intelligentspeculator.net/free_stock_picks/best-airline-stocks/comment-page-1/#comment-4994 Positroll Thu, 04 Feb 2010 18:02:44 +0000 http://www.intelligentspeculator.net/?p=1736#comment-4994 Yes. Bought a little at $ 6 a long time ago, held on (too long), started heavy buying below $ 2,50 when they recovered after the Colgan crash (as investors were reassured that insurance would cover all costs), sold 1/4 aroung 6.60, holding another 1/4 until we get to $10-12 and the remaining half for fair value ... Yes. Bought a little at $ 6 a long time ago, held on (too long), started heavy buying below $ 2,50 when they recovered after the Colgan crash (as investors were reassured that insurance would cover all costs), sold 1/4 aroung 6.60, holding another 1/4 until we get to $10-12 and the remaining half for fair value …

]]> By: IS http://www.intelligentspeculator.net/free_stock_picks/best-airline-stocks/comment-page-1/#comment-4989 IS Thu, 04 Feb 2010 15:07:28 +0000 http://www.intelligentspeculator.net/?p=1736#comment-4989 @Positroll - thanks a lot for those comments, are you a holder of Pinnacle? @Positroll – thanks a lot for those comments, are you a holder of Pinnacle?

]]> By: Positroll http://www.intelligentspeculator.net/free_stock_picks/best-airline-stocks/comment-page-1/#comment-4878 Positroll Fri, 29 Jan 2010 17:53:11 +0000 http://www.intelligentspeculator.net/?p=1736#comment-4878 Pinnacle Airlines. Market cap: 150 mio. FCF 2009 should be approx. 75-80 mio. (normalized 55+). Tangible net book value: way above $12 / share. Growing its business. Trading at a mere $ 8 (but steadily rising since after the Colgan crash, which is covered by insurance). Earnings don't really matter, due to comlicated tax situation after Northwest bankruptcy (they got and will get big tax refunds for loosing money which they did by buying Colgan Air and are still doing by buying new planes (Q400s) for Colgan). The balance sheet looks not too great on first glance due to GAAP accounting regarding a "deferred revenue liability" of 216 mio. arising out of the Northwest bankruptcy that can be ignored as it does not require the company to deliver any services or make any payments at all. A little older but still interesting: http://seekingalpha.com/article/118144-pinnacle-airlines-risk-reward-makes-it-worth-a-look "In 2008, 75% of Pinnacle’s revenue was generated under “Capacity Purchase Agreements”. This is a cost plus model where Pinnacle’s airline customers such as Delta/Northwest assume many of the risks that typically make airline earnings cyclical and volatile. Pinnacle does not assume fuel risk or consumer demand risk and is reimbursed for costs such as insurance and airport landing fees." These contracts continue for the next 7 years, so imO a 7 year multiple on FCF seems to be the minimum for any "fair value" discussion. More current discussion: http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_P/threadview?m=te&bn=22930&tid=3619&mid=3619&tof=16&frt=2#3619 The future: http://www.centreforaviation.com/news/2009/12/14/smaller-regional-jets-doomed-pinnacle-discusses-expected-industry-changes/page1 (though I expect PNCL to reduce their DAL flying less than indicated in the article due to Mesa going belly up and DAL probably adding former JAL flying. Pinnacle Airlines.

Market cap: 150 mio. FCF 2009 should be approx. 75-80 mio. (normalized 55+). Tangible net book value: way above $12 / share. Growing its business. Trading at a mere $ 8 (but steadily rising since after the Colgan crash, which is covered by insurance).

Earnings don’t really matter, due to comlicated tax situation after Northwest bankruptcy (they got and will get big tax refunds for loosing money which they did by buying Colgan Air and are still doing by buying new planes (Q400s) for Colgan).

The balance sheet looks not too great on first glance due to GAAP accounting regarding a “deferred revenue liability” of 216 mio. arising out of the Northwest bankruptcy that can be ignored as it does not require the company to deliver any services or make any payments at all.

A little older but still interesting:
http://seekingalpha.com/article/118144-pinnacle-airlines-risk-reward-makes-it-worth-a-look
“In 2008, 75% of Pinnacle’s revenue was generated under “Capacity Purchase Agreements”. This is a cost plus model where Pinnacle’s airline customers such as Delta/Northwest assume many of the risks that typically make airline earnings cyclical and volatile. Pinnacle does not assume fuel risk or consumer demand risk and is reimbursed for costs such as insurance and airport landing fees.”
These contracts continue for the next 7 years, so imO a 7 year multiple on FCF seems to be the minimum for any “fair value” discussion.

More current discussion:
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_P/threadview?m=te&bn=22930&tid=3619&mid=3619&tof=16&frt=2#3619

The future:
http://www.centreforaviation.com/news/2009/12/14/smaller-regional-jets-doomed-pinnacle-discusses-expected-industry-changes/page1
(though I expect PNCL to reduce their DAL flying less than indicated in the article due to Mesa going belly up and DAL probably adding former JAL flying.

]]> By: IS http://www.intelligentspeculator.net/free_stock_picks/best-airline-stocks/comment-page-1/#comment-4828 IS Tue, 26 Jan 2010 01:25:24 +0000 http://www.intelligentspeculator.net/?p=1736#comment-4828 @Zavi - Yes I see your point but even those companies have suffered. Think about all of those public reactions to executives spending money on private business jets? I don't agree with those calls to justice but they are there. @Zavi – Yes I see your point but even those companies have suffered. Think about all of those public reactions to executives spending money on private business jets? I don’t agree with those calls to justice but they are there.

]]> By: Zavi http://www.intelligentspeculator.net/free_stock_picks/best-airline-stocks/comment-page-1/#comment-4767 Zavi Wed, 20 Jan 2010 16:01:14 +0000 http://www.intelligentspeculator.net/?p=1736#comment-4767 Nice picture. We know that government had decided in December to increase security measures for all flights to the United States (because of the December 25 incident on Northwest airlines). Because all these reasons you mentioned, the industry of private business jets and executive jet charters had explode the past few weeks!! They can increase flexibility and enhance your privacy and security. And prices are not that bad considering the time saved! Maybe that's the future? Nice picture. We know that government had decided in December to increase security measures for all flights to the United States (because of the December 25 incident on Northwest airlines). Because all these reasons you mentioned, the industry of private business jets and executive jet charters had explode the past few weeks!! They can increase flexibility and enhance your privacy and security. And prices are not that bad considering the time saved! Maybe that’s the future?

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