New Pick: FRNT
Frontier Air is a local air carrier out of Denver. It's share price is currently 3 3/8, and has been hugging the bottom since October, when the price dropped due to a negative earnings report that had followed 2 qtrs of profitability. It is currently not profitable. It is an expanding company with 8M+ shares, Book value of ~ 1.50, increasing revenues, owns 10 planes and is planning on adding 4 more within the next year. (It brings all those Californians to Colorado). It is currently in a brawl with United, the dominant carrier out of Denver, and has filed a complaint with government agency. It is a low fare carrier, and has been effected by the Value Jet concerns. There is significant competition in this industry as a whole, and w/in the Denver area, in addition to United, there are 2 puddle-jumpers that also compete. There are rumors that Frontier is talking to merge with Maverick Air, that commutes to ski resorts.
It had a hi of 11 last year, and a strong support level at 7.
This pick might be premature, but I base my suggestion to look at this stock on the following: 1) increased costs resulting from increased scrutiny of low fare carriers have been absorbed; 2) they are adding planes and routes; 3) they were effected by increasing gas prices and I don't think gas prices will go much higher (I could be wrong); 4) we are heading into spring/summer, which always results in increased air traffic.
Good luck.
Best regards,
P. Webster |
