Traders Tip: Frontier Airlines (FRNT)
Frontier Airlines, after a stellar run from $7 (Oct.1999) to $26 (Feb. 24, 2001), gave an earnings warning two weeks ago and has fallen off of a cliff. Consensus was for .59 cents for next quarter and FRNT estimated .38-48 cents. Subsequent analysts downgrade from James Parker (Raymond James Financial) has sent the stock from $26 (Feb 24) down to $12 1/8 Friday close, down 55% in two weeks.
Parker stated that earnings will be flat next two quarters, then should pick up at end of year, citing higher expenses related to integration of new Airbus aircraft, expenses in pilot training, and increased competition from United in the Denver area. FRNT cited bad weather cancellations in February for the major cause of anticipated shortfall.
I may be a country-boy from NYC, but FRNT now has a PE of 6
and seems oversold. This looks like a nice entry point for a well-run, small market niche airline, ala Southwest (LUV).
It is still falling, but I am tracking and will shortly start accumulating near this level for a LT hold. Any thoughts?
P.S. My occasional posts are directed more toward intermediate and LT holds rather than shorts, day-trades, and quick swing trades. If this is not appropriate to this board, please PM me and I will "cease and desist". |
