Pinnacle Airlines Corp. (PNCL)

All Comments on PNCL

  • commenter
    Ogradius
    Aug 26 08:58 PM
    About Pinnacle Airlines, and Concentrated Risk [view article]
    I started following PNCL not only because Mr. Pabrai owned it but also because it was rated five stars by Morningstar (in early 2008) and appeared on the 'Endeavor List' at Merrill Lynch (also early 2008).

    PNCL has shown me the importance of what Buffett calls a solid competitive advantage or a 'moat'. Further, in the absence of a 'moat', a very wide margin of safety is absolutely necessary when investing in companies like PNCL. I'm not saying that PNCL is a bad company. It is, however, a small company relying on bigger companies who are sensitive to a number of factors out of their control.

    Mohnish Pabrai is a talented individual, but, I have to admit, I do not think I could sleep well if I purchased too many of his picks. However, having researched PNCL a bit, the stock may indeed be trading at a very large discount to intrinsic value which I estimated at about $13. It may be a great entry point for someone with a strong tolerance for uncertainty.     Reply
  • commenter
    BxCapricorn
    Aug 24 03:58 PM
    Pinnacle Taking Flight - Barron's [view article]
    Just wanted to weigh in, now that a year has almost passed. Two word summary - Value Trap. I spent a lot of time making fun of Pabrai Mohnish and his buying of this stock back in November 2007. This was his favorite airline, and they leveraged themselves like a bank (isn't their leverage ratio something like 22?) during a series of cost increases (security related, airport fee increases, and fuel, fuel, fuel increases). Like every airline, they face pilots who are befuddled that they aren't paid more. These pilots strike every time they are pushed to add more flights, wage & benefit concessions, etc. The government does nothing to help them, but continually passes new legislation requiring added security measures, paid for inevitably by the airlines/airports. I could go on all day. In short, airlines are lousy investments, and it seems only Bill Miller and Pabrai Mohish liked them, which speaks volumes. Reply
  • commenter
    Mr.Lucky
    Aug 21 09:29 PM
    General Discussion on PNCL
    Hey all, check out talkairline.com, it has a Pinnacle section. Reply
  • commenter
    NollierCapit
    alMgmt
    Aug 20 10:33 AM
    Hedge Fund Tracking: Clarium Capital [view article]
    Marketfolly,

    I believe we are saying the same thing here or at least seeing the same potential opportunity. Just remember, no ever buys the lows and sells the highs consistently. And if you meet someone who says they do....they're a liar.     Reply
  • commenter
    marketfolly
    Aug 19 10:26 PM
    My Website
    Hedge Fund Tracking: Clarium Capital [view article]
    NollierCapitalManageme...

    my thoughts on AXP simply stem from my belief that rising consumer debt and credit card receivables will be the next "shoe to drop," stemming from the housing bubble, credit crunch, and various other headwinds facing an increasingly poorer consumer.

    i agree with your thoughts though regarding their payment processing segment, as I believe that will be a great source of revenue going forward (see MA, V). Also, I think you are correct in that they have developed a strong brand. As a longer term investor, this name can make great sense.

    However, looking out 6-12 months, I still feel the benefits they see from payment processing will be offset by rising delinquencies and charge-offs. I just look at them as a MA or V, but with credit exposure. And, therefore, MA and V should outperform AXP in the near-term. Longer term though, don't get me wrong, AXP does make some sense. But, why buy it now if I think I can buy it cheaper some time from now, ya know?

    Thanks for the comments.     Reply
  • commenter
    Frankfurt/He
    ssen
    Aug 19 04:35 PM
    Hedge Fund Tracking: Clarium Capital [view article]
    Nollier,

    how much you made today on AXP as after 3 years you may be well long dead just as everybody else.
    If one don't know to make money today,then gardening is another very engaging proposition.     Reply
  • commenter
    NollierCapit
    alMgmt
    Aug 19 02:50 PM
    Hedge Fund Tracking: Clarium Capital [view article]
    Good write up. Just curious as to why you feel AXP is a little ify here? Most people categorize AXP as a credit card company when in fact credit cards are a very some piece of their overall business. A large percentage of their revenues come from merchant fees, processing fees, i.e. closed loop network. I would argue that they are a pay card company. They also have the travel business going for them. I agree they became greedy by entering certain markets with their credit card marketing campaigns. This has caused them pain in the short term. However, this is an iconic brand that has become cheap for the first time in a long time. These scenarios happen infrequently. Those who buy or have bought AXP will be rewarded over the next three years. Yes, AXP could get cheaper but I would bet money managers would add to their positions if it occurs. Cheers! Reply
  • commenter
    Norman
    Lepoff, M.D.
    Aug 19 09:25 AM
    Hedge Fund Tracking: Clarium Capital [view article]
    Very informative article. Thank you. Reply
  • commenter
    marketfolly
    Aug 18 11:47 PM
    My Website
    Hedge Fund Tracking: Clarium Capital [view article]
    at the end of july they were up around over 45% year to date Reply
  • commenter
    mkreisel
    Aug 18 08:11 PM
    Hedge Fund Tracking: Clarium Capital [view article]
    How is Clarium's YTD performance? Reply
  • commenter
    Jeff - CoC
    Aug 18 11:34 AM
    My Website
    About Pinnacle Airlines, and Concentrated Risk [view article]
    94487,

    Look at the second page of his ownings in the 13-F. He still owns Wellcare in the same amount.

    101010,

    I agree that the small and micro cap field can indeed be filled with landmines. I don't think that's any reason to ignore it, though.

    You do need to be filled with a sense of risk and be looking for risk under every rock. As I'd highlighted in the article, risk is everywhere and, in small caps with no moat especially, you really need to be atuned to all of the risk factors that could cause your investment to take a big hit.

    Maybe Mohnish didn't take enough caution, I'm not sure. Maybe Pinnacle will triple from here. I can't make that judgment. But there are some obvious lessons to be taken from a company, in this case PNCL but that includes many companies, that rely on only a few companies for business. The "tail risk" grows in that proposition.     Reply
  • commenter
    User 94487
    Aug 17 11:03 PM
    About Pinnacle Airlines, and Concentrated Risk [view article]
    The just filed 13F from Pabrai indicates that WCG was sold completely, after being featured by Pabrai at May Value Investing Congress.

    Reply
  • commenter
    101010
    Aug 17 03:12 PM
    About Pinnacle Airlines, and Concentrated Risk [view article]
    Excellent article.

    Judging by Mohnish Pabrai's Form 4 purchase history, I'd say Mr. Pabrai has learned a few hard lessons by trying to smash a value investing "home run" with super-cheap small caps. It really just doesn't work that way. Perhaps it was a desire to rapidly catapulting himself to a level where others will bid $650,100 to have lunch with *him*. Pigs gets slaughtered, and the market ate Monish for lunch. I'm not one for excessive schadenfreude and I have a great deal of compassion for the huge losses he's had to swallow, but I'm sure Pabrai is digesting a lesson that will only make him come back stronger.

    Always keep in mind: small/micro cap + "great" value = value trap. (Much more often than not.)

    As quaint as the story of David and Goliath may be, no matter how great/underappreicated a particular micro-cap "David" may seem... 99 out of 100 times, Goliath smashes him and soon everybody forgets he ever existed. But that 1 time out of a 100 makes for great CNBC news fodder and bedtime stories. Everybody kicks themselves for "missing the boat" and so are on the look-out for that next undervalued David to pick up a rock.

    Remember, all the present day "Goliaths" were once "Davids"-- because they have a proven track record for surviving and thriving. Invest in Goliaths when the price is cheap... but not so cheap that their market cap makes 'em look like a scrawny David. And don't gamble your hard earned money on the next chump to toe the line and throw rocks at the giants.     Reply
  • commenter
    notsosmart
    Aug 17 12:06 PM
    My Website
    About Pinnacle Airlines, and Concentrated Risk [view article]
    someone said" if you want to become a millionaire,start out with a billion & invest in airline stock". wether you are long,short,or indifferent,wall st has becom vegas.you lose slower & nobody brings you a drink.believe nobody about anything.all have an agenda & for the most part its a hand in your pocket.think for yourself. Reply
  • commenter
    lasdc9
    Aug 17 10:41 AM
    About Pinnacle Airlines, and Concentrated Risk [view article]
    Airline stocks are not investments they are for day traders and gamblers. Regional airlines like Pinnacle are even more so, since their very existences are tied to the major carrier they code share with.

    Pinnacles balance sheet is so closely tied to Northwest and now Delta that the earnings of Pinnacle are nothing more than manipulated figures of Delta and Northwest whims.

    I once worked for an airline called West Air it was the Commuter Airline of the year in 1999 grew into a large regional airline and split in two, West Air and Atlantic Coast Airlines, then United pulled the code share contract and both West Air and ACA were gone.

    It appears to me that Mohnish is nothing more than a big risk taker who hopes to hit one out of the park, but unfortunately keeps striking out.
    Reply
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