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Alexander Paslawsky
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I am a University of Central Florida alumni and graduate of the University of South Florida's M.S. in Entrepreneurship in Applied Technologies program. I enjoy researching stocks and ideas that can generate very large gains. I focus my stock and option trading on takeover speculation, earnings... More
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  • Skywest Poised To Fly Higher

    Skywest, Inc. (NASDAQ:SKYW) dominates the U.S. regional airline industry under flying agreements as Skywest Airline and ExpressJet Airline. They provide regional service for most of the mainline airlines including Alaska (NYSE:ALK), Delta (NYSE:DAL), American (NASDAQ:AAL) and United (NYSE:UAL). Although lower fuel prices have been bullish for most airline stocks, Skywest operates under flying agreements with the above mentioned carriers and fuel is passed through to them for the most part. But, what is bullish for Skywest, Inc?

    Cash position

    As of their last quarterly report, Skywest held $10.60 per share in cash or equivalents. At a current stock price of $12.60. You are basically buying Skywest for $2 a share.

    Fleet improvement

    On Nov 17th, 2014 Skywest, Inc announced plans to transition to an all jet fleet, while phasing out their 30 seater Embraer 120's and reducing the term on their contracts with United Airline on their 50 seater Embraer 145.

    (click to enlarge)Brasilia 120 turboprop

    On May 21st, 2013 Skywest announced a firm order for 100 Embraer 175 aircraft and the option to purchase 100 more.

    E175

    The fleet improvement will help bring down maintenance costs and salary/wage expenses for Skywest which were 21% and 40% of total operating expenses. Paying 2 pilots to fly 70 passengers is more cost effective than paying 2 pilots to fly 30 passengers at a time.

    Alaska Deal

    Skywest also purchased 7 E175 aircraft to fly under a capacity agreement with Alaska Airlines. More details on that deal are here along with commentary from Kevin Schorr, Vice President of a Virginia based consulting firm.

    Skywest only flew 2.1% of its aggregate capacity for Alaska, so there is plenty of room to grow.

    Technical Analysis of SKYW chart

    (click to enlarge)stockcharts.com skyw

    Tags: SKYW, airline
    Feb 11 1:45 AM | Link | Comment!
  • Frontier Communications Is A Takeover Target

    Frontier Communications (NASDAQ:FTR) provides voice, data, internet, and television

    service to customers primarily in rural areas and small to medium cities in

    the United States. Nearly 70% of their residential customers are located in

    the following states; West Virginia, New York, Indiana, Illinois, Ohio,

    Michigan, Washington, and Oregon.

    (click to enlarge)

    Source: 2013 FTR annual report.

    Since, Frontier operates in rural areas it is much more difficult and costly for

    other telecoms to move in, build and compete with Frontier. The customers

    are spread out and the cost to build a network and take market share is not

    feasible. The only other option for competitors to gain market share is to

    acquire an existing service provider like Frontier.

    Charter Communications (NASDAQ:CHTR) headquartered in Stamford, Connecticut is

    the 4th largest cable operator by revenue in the United States. Charter made

    a bid already for Time Warner Cable (NYSE:TWC) earlier this year, but was

    rejected. In December of 2013, Frontier made a 2 billion dollar all cash deal

    to acquire all of AT&T's wireline business and assets in Connecticut. Frontier

    will have a huge customer base in Charter's home state of Connecticut once

    the AT&T (NYSE:T) deal closes as well as it's existing rural base. Charter acquiring

    Frontier makes sense given the geographical areas it would expand to and

    AT&T wireline assets in Connecticut.

    Liberty Media Corp (NASDAQ:LMCA) would also make a great potential acquirer of

    Frontier for the same reasons noted above. However, Liberty Media could

    also take a stake in Frontier similiar to it's 27% stake in Charter. Frontier

    currently yields 7.37% and pays the divident with free cash flow according to

    their most recent annual report. Not to mention, Frontier has short interest of

    207 million shares as of March 14th 2014. If Liberty Media Corp took a stake

    in Frontier, there would be a frenzy to cover those shares that are short. The

    below chart shows a cup and handle pattern that could push the stock up to

    $6.75 per share from its current price of $5.41.

    (click to enlarge)

    Due to Frontier's unique customer base an acquisition would make perfect

    sense for one of its competitors.

    Disclosure: I am long FTR.

    Tags: FTR, LMCA, CHTR, TWC
    Mar 26 2:39 PM | Link | Comment!
  • Chart Update: Valuing The Proposed Buyout Of BKS Retail

    (click to enlarge)

    We have another 5 points of upside in BKS if we clear this line of resistance.

    Update to chart: 5/14/2013 (sold entire position 5/9/2013)

    (click to enlarge)

    Disclosure: I am long BKS.

    Additional disclosure: long BKS call options (exited position on 5/9/2013).

    Mar 11 3:12 PM | Link | Comment!
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