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Here's Why SkyWest (SKYW) Deserves a Place in Your Portfolio
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SkyWest, Inc. (SKYW - Free Report) has been a star performer so far this year. Shares of this Zacks Rank #1 (Strong Buy) company have gained 38.3% year to date, significantly outperforming the industry’s 6.9% rally.
In fact, the company’s constant efforts to modernize its fleet and streamlining its operations are impressive. 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 October 2017. For the first ten months of the year, the carrier reported a 5.4% decrease in block hours.
Notably, SkyWest has an impressive earnings surprise history, having beaten estimates in each of the last 13 quarters. In the third quarter of 2017, this St. George, Utah-based carrier performed very impressively, reporting better-than-expected earnings and revenues. We expect SkyWest to continue performing impressively in the near term as well.
In fact, a solid earnings track record generally works as a catalyst in boosting the stock price. This is because it indicates the company’s ability to surpass earnings estimates. More often than not, investors take into account a company’s buoyant earnings history while betting on the stock with the expectation that it will continue beating earnings estimates in its next releases.
Furthermore, the company’s efforts to reward shareholders through dividends and share buybacks raise optimism in the stock. In February 2017, the company hiked its quarterly dividend by 60%.
A Broker Favorite
SkyWest’s earnings estimates reflect a healthy uptrend. Over the last 90 days, the stock has witnessed the Zacks Consensus Estimate for current-quarter earnings being revised 4.5% upward. Also, the current-year earnings estimates have climbed 2.5% in the same time frame. In fact, earnings per share for 2017 are projected to grow 21.7% year over year.
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 1.8x, which is less than the industry average. Additionally, the stock has an attractive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores
Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM score.
Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.
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 GOL Linhas , International Consolidated Airlines Group SA (ICAGY - Free Report) and Deutsche Lufthansa AG (DLAKY - Free Report) . While GOL Linhas and International Consolidated Airlines Group sport a Zacks Rank #1, Deutsche Lufthansa carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
While shares of International Consolidated Airlines have surged more than 44% in a year, GOL Linhas and Deutsche Lufthansa have skyrocketed in excess of 100% each, over the same time period.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Here's Why SkyWest (SKYW) Deserves a Place in Your Portfolio
SkyWest, Inc. (SKYW - Free Report) has been a star performer so far this year. Shares of this Zacks Rank #1 (Strong Buy) company have gained 38.3% year to date, significantly outperforming the industry’s 6.9% rally.
In fact, the company’s constant efforts to modernize its fleet and streamlining its operations are impressive. 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 October 2017. For the first ten months of the year, the carrier reported a 5.4% decrease in block hours.
Notably, SkyWest has an impressive earnings surprise history, having beaten estimates in each of the last 13 quarters. In the third quarter of 2017, this St. George, Utah-based carrier performed very impressively, reporting better-than-expected earnings and revenues. We expect SkyWest to continue performing impressively in the near term as well.
In fact, a solid earnings track record generally works as a catalyst in boosting the stock price. This is because it indicates the company’s ability to surpass earnings estimates. More often than not, investors take into account a company’s buoyant earnings history while betting on the stock with the expectation that it will continue beating earnings estimates in its next releases.
Furthermore, the company’s efforts to reward shareholders through dividends and share buybacks raise optimism in the stock. In February 2017, the company hiked its quarterly dividend by 60%.
A Broker Favorite
SkyWest’s earnings estimates reflect a healthy uptrend. Over the last 90 days, the stock has witnessed the Zacks Consensus Estimate for current-quarter earnings being revised 4.5% upward. Also, the current-year earnings estimates have climbed 2.5% in the same time frame. In fact, earnings per share for 2017 are projected to grow 21.7% year over year.
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 1.8x, which is less than the industry average. Additionally, the stock has an attractive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores
Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM score.
Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best upside potential.
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 GOL Linhas , International Consolidated Airlines Group SA (ICAGY - Free Report) and Deutsche Lufthansa AG (DLAKY - Free Report) . While GOL Linhas and International Consolidated Airlines Group sport a Zacks Rank #1, Deutsche Lufthansa carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
While shares of International Consolidated Airlines have surged more than 44% in a year, GOL Linhas and Deutsche Lufthansa have skyrocketed in excess of 100% each, over the same time period.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>