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Here's Why You Should Add SkyWest (SKYW) to Your Portfolio
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St. George, Utah-based SkyWest, Inc. (SKYW - Free Report) has been performing well of late. Shares of this Zacks Rank #2 (Buy) company have gained 4.4% in the last month, outperforming the Zacks categorized Transportation-Airline industry’s addition of 3.8%.
We are impressed by the carrier’s constant efforts to modernize its fleet and streamlining its operations. It aims to reduce the 50-seat jets in its fleet and add new E175 aircraft. To this end, the company reported a decline in block hours (a measure of aircraft utilization) in May 2017. In fact, the carrier reported a 6.4% decrease in block hours for the first five months of the year.
Notably, the carrier has an impressive history with respect to earnings per share having outperformed the bottom line in each of the last 11 quarters. In fact, in the recently reported quarter (first quarter of 2017) the carrier performed very impressively, outperforming not only with respect to earnings but also revenues. We expect SkyWest to continue performing impressively in the near term as well.
A Broker Favorite
Earnings estimates for SkyWest have exhibited a healthy uptrend. Over the last 60 days, the 2017 Zacks Consensus Estimate of earnings has moved up 13 cents to $3.18 per share on the back of multiple upward revisions. In fact, earnings per share for the current year are projected to grow at a healthy 16.3%, over 2016 levels. The Zacks Consensus Estimate for 2018 has also jumped 9 cents over the last two months to $3.53 per share.
Given the wealth of information at the disposal of brokers, it is in the best interests of investors to be guided by broker advice and the direction of their estimate revisions. This is because the direction of estimate revisions serves as an important pointer when it comes to the price of a stock.
Valuation & Style Score
On a price-to-book basis, shares are trading at 1.4x, which is less than the industry average. Also, on a price-to-sales basis, shares are trading at 0.6x, a significant discount to the industry average of 0.9x. Currently, SkyWest trades at a forward P/E of 11.3x, which again compares favorably to the industry average.
Additionally, the stock has an attractive VGM Score of ‘A’. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores.
Taking into account the above-mentioned tailwinds and the favorable readings, we believe that the current price represents an attractive entry point for investors. The carrier’s bullish Zacks Rank also supports our view.
Shares of Air France-KLM, Ryanair and Deutsche Lufthansa have rallied over 50%, 30% and 36%, respectively, in the last three months.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Here's Why You Should Add SkyWest (SKYW) to Your Portfolio
St. George, Utah-based SkyWest, Inc. (SKYW - Free Report) has been performing well of late. Shares of this Zacks Rank #2 (Buy) company have gained 4.4% in the last month, outperforming the Zacks categorized Transportation-Airline industry’s addition of 3.8%.
We are impressed by the carrier’s constant efforts to modernize its fleet and streamlining its operations. It aims to reduce the 50-seat jets in its fleet and add new E175 aircraft. To this end, the company reported a decline in block hours (a measure of aircraft utilization) in May 2017. In fact, the carrier reported a 6.4% decrease in block hours for the first five months of the year.
Notably, the carrier has an impressive history with respect to earnings per share having outperformed the bottom line in each of the last 11 quarters. In fact, in the recently reported quarter (first quarter of 2017) the carrier performed very impressively, outperforming not only with respect to earnings but also revenues. We expect SkyWest to continue performing impressively in the near term as well.
A Broker Favorite
Earnings estimates for SkyWest have exhibited a healthy uptrend. Over the last 60 days, the 2017 Zacks Consensus Estimate of earnings has moved up 13 cents to $3.18 per share on the back of multiple upward revisions. In fact, earnings per share for the current year are projected to grow at a healthy 16.3%, over 2016 levels. The Zacks Consensus Estimate for 2018 has also jumped 9 cents over the last two months to $3.53 per share.
Given the wealth of information at the disposal of brokers, it is in the best interests of investors to be guided by broker advice and the direction of their estimate revisions. This is because the direction of estimate revisions serves as an important pointer when it comes to the price of a stock.
Valuation & Style Score
On a price-to-book basis, shares are trading at 1.4x, which is less than the industry average. Also, on a price-to-sales basis, shares are trading at 0.6x, a significant discount to the industry average of 0.9x. Currently, SkyWest trades at a forward P/E of 11.3x, which again compares favorably to the industry average.
Additionally, the stock has an attractive VGM Score of ‘A’. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores.
Taking into account the above-mentioned tailwinds and the favorable readings, we believe that the current price represents an attractive entry point for investors. The carrier’s bullish Zacks Rank also supports our view.
Other Stocks to Consider
Investors interested in the airline space may also consider Air France-KLM SA (AFLYY - Free Report) , Ryanair Holdings (RYAAY - Free Report) and Deutsche Lufthansa AG (DLAKY - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Air France-KLM, Ryanair and Deutsche Lufthansa have rallied over 50%, 30% and 36%, respectively, in the last three months.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>