Frontier Stock & Earnings

[Bjetset2]

Hello Anyone:

Anyone think FRNT stock is a good buy at $3.00? I assume a loss for the quarter on Friday, any ideas on how bad?

Thanks much.

 

[Cardinal]

Consensus is -.80 to -.85/share.

I think it's a good buy at 3.00, but not because I'm starry eyed optimistic. Because it's way below book value. If the airline chained up the aircraft tomorrow and liquidated, cash on hand + equity in the aircraft - liabilities is far more than the current 110 million market cap. Chapter 7 would work out in favor of the shareholder, which isn't all that common a circumstance.

I confess to buying a little at 3.00.

 

[StaySeated]

Expect a loss in the 25 to 30 million range. Just because a stock is at an all time low does not imply it is a good buy.

Shareholders are the LAST in line to get paid if a company files either 7 or 11. Secured creditors, unsecured creditors, shareholders. That is the order, and common stock shareholders are the last in line of the shareholders.

If you throw any cash at this company consider it a loss and hope for an acquisition. The necessary premium will be the only rise in stock price for the foreseeable future as earnings are forecasted to be nil for 2008. We are almost 20% hedged at 60-65 for another two months then our hedges are zero. Planes will be parked in march if oil stays in the 90's.

As far as the balance sheet, total assets minus total liabilities currently = around 150 million.

Assets = 950 million
Liablities = 833 million

These numbers are from the last 10k, but I adjusted the assets down due to the fact that our cash has plummeted from 250 million last May to 150 after tomorrows announcement.

My point is you couldn't buy the airline for $3 a share. You have to pay a premium, and usually a steep premium. Even without the premium a buy for today's market cap would be a total wash. A purchase with the premium would be a loss. A purchase and sale doesn't make sense.

 

[Bjetset2]

Thanks

Thanks for the replies everyone.

Jim

 

[USMC319]

Jim,
You will probably be fine buying in the $3 range. Tomorrow (01-25-08) you may be able to snap up some shares below $3. In either case I would expect that with what the CEO has in the works, this stock will be OK going long and of course if there is a M/A in the meantime, there will be a premium. However, if you want to make money on FRNT stock you would be better off playing the "shorts" because this stock is artificially volitile whenever any SWA or UAL news comes out. But who knows...thats why they play the game.

 

[Bjetset2]

Thanks Again

Thanks USMC. I think you may be right. Earnings are out at -.89 for the Q. I may try to pick up 10K shares tomorrow below $3.00 It's a calculated risk for a double by years end. Banking on oil coming back to $80 or so and heavy summer traffic. We'll see.

Jim

 

[Bjetset2]

FRNT Shorting

Oh by the way USMC good point on shorting it against UAL, SWA news. Never thought of that.

 

[D-Bo]

Thanks USMC. I think you may be right. Earnings are out at -.89 for the Q. I may try to pick up 10K shares tomorrow below $3.00 It's a calculated risk for a double by years end. Banking on oil coming back to $80 or so and heavy summer traffic. We'll see.

Jim

Good luck on that gamble. I could think of way better cheaper stocks to throw 30Gs at. I wouldn't put my own money into the airline industry. In this case, you very well could lose it all. You'd have a better chance of doubling your money on a risky E-Trade position. No way would I want to hold any airline stock unless it was given to me.
Your plan may work but there are much smarter plays out there.

 

[easydoesit]

I will never throw any of my money at airline stock. If you talk to anyone who knows anything about investing, they will tell you to never buy airline stock. Pay heed.

 

[Larcifer]

M/A could very well mean a stock swap such as being talked about with DAL, NWA, UAL. Airline stocks are not for the faint of heart.