Tag - Rjet

What a start to the trading week! Yesterday we saw stocks jump out of the gate, and while volume was light in many instances, most stocks finished the day with nice gains. The Russell 2000 small-cap index gained 2.2% to close at 642, the highest level we've seen since January 19^th.  The next level of resistance I'm targeting is 660 on the index, and judging by the gains we saw in overseas markets last night, I think the Russell will charge higher today.

Remember Republic Airways (NASDAQ: RJET), the beaten down airline stock we reviewed last week? Last Monday I featured this stock that one of our readers, Patricio, requested I take a closer look at. In that issue of Small Cap Investor DailyI wrote, "The bottom line here is that Republic Airways is cheap, really cheap. Its stock has fallen apart because of industry pressures and a tough economy. But if any positive developments occur, the stock could move higher. I think speculative investors who are comfortable using a bottom-feeder strategy and picking up shares in hopes of a dead cat bounce could profit from Republic Airways." 

Well last Thursday Republic Airways announced that it booked a big one-time gain as a result of the bargain priced acquisition of Frontier Airlines. The company stated that revenue in the fourth quarter rose 88%, bringing full year revenue up to $1.64 billion, an increase of 10.8% over last year. The news sent the stock soaring, and by the closing bell on Friday shares rose 14.5%.  

For the last eight consecutive trading days and the second consecutive week the Russell 2000 small cap index has roared higher. Last Friday the Russell 2000 rose another .4% to close at 632. The index hasn't been at this level since January 20^th, a full month ago. And with both European and Asian markets rising during Monday's trading session, I expect we'll see similar gains from U.S. small-cap stocks today. The iShares Russell 2000 ETF (NYSE: IWM) has followed suit, rising eight straight days to finish the week at $63.06. This close marks the ETF's first close above $63 since January 20^th.   

 ***I wrote in Friday's issue of Small Cap Investor Daily that I'll be taking a closer look at individual stocks again. You sent in some interesting requests over the weekend so let's move on and take a look in the mailbag. First up is Small Cap Investor Pro subscriber Patricio.  

"Dear Ian, as a Small Cap Investor Pro subscriber I follow regularly your analysis and points of view on the Small Cap Market Indices and companies. I would really appreciate your thoughts on Republic Airways Inc. (NASDAQ: RJET), the largest regional carrier in the USA. The stock has been hammered over the past few weeks, but has recovered lately. It has a dominant market share and what I consider an attractive P/E ratio. Thank you in advance." 

As Patricio noted, Republic Airways is a regional airline and the company has a market cap of $184 million. The company owns Chautauqua Airlines, Frontier Airlines, Lynx Aviation, Midwest Airlines, Republic Airlines and Shuttle America. 

China Grentech Corp Ltd. (Nasdaq:GRRF), Lifeway Foods Inc. (Nasdaq:LWAY) and United Security Bancshares (Nasdaq:UBFO) are among the biggest percentage gainers in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Republic Airways Holdings Inc. (Nasdaq:RJET), Bank of Commerce Holdings (Nasdaq:BOCH), VanceInfo Technologies Inc. (Nasdaq:VIT), Delta Apparel Inc. (Nasdaq:DLA), KMG Chemicals Inc. (Nasdaq:KMGB) and Ampco Pittsburgh Corp. (Nasdaq:AP).

It started off as another ugly day for stocks. But the major indices rallied out of the hole after hitting their lows for the day around 11 AM. There was no particular fundamental catalyst propelling stocks prices higher. The move appears to be technically based, with traders apparently considering the drop to 886 on the S&P 500 close enough to support At 880 to start buying.

The S&P finished the day with a slight 2.3 point gain. The Dow Industrials finished up 44 points, completing a 122 point reversal. Only the Nasdaq finished in the red. The 9 point loss there was led by Apple (Nasdaq:AAPL) and Amazon.com (Nasdaq:AMZN).

 

Once again, there plenty of regional banks on the top performers' list. Park Federal (Nasdaq:PFED) was up 34%. Eurobancshares (Nasdaq:EUBK) rose 18% and Community Shores Bank (Nasdaq:CSHB) was up 18%. The only problem is that these stocks are rallying on extremely light volume.

At least with today's decliners, there are some stocks that aren't regional banks. TerreStar (Nasdaq:TSTR) dropped 20%. Spectrum Pharmaceuticals (Nasdaq;SPPI) was off 16% and Republic Airways Holdings (Nasdaq:RJET) was down 16%.

*****Despite the early declines, TradeMaster technical analyst Jason Cimpl had us prepared with his excellent video chart analysis that accompanied Thursday's Daily Profit. If you missed Jason's analysis, here's the link again.

 

Jason is expecting some upside later in the week. That would coincide with the start of earnings season. Alcoa (NYSE:AA) kicks things off tomorrow.

*****Bloomberg is reporting that the earnings decline is slowing. Year over year corporate earnings fell around 60% in the first quarter. Earnings were expected to have dropped another 34% last quarter and may slow to a 21% drop in the third quarter.

67% of companies beat expectations in the first quarter. But of course, when expectations were as low as they were, that's not particularly impressive. Plus, gains were accomplished through cost-cutting, which is only a temporary fix. Still it was enough to get a rally going. It will be interesting to see if earnings season can send stock prices higher again...

*****Oil has dropped to $64 a barrel. Demand is down as the economic recovery is not exactly robust. Back in 2005 and 2006, oil was the leading indicator for the economy. Even though oil prices were taking a bite out of consumers' budgets and even sparking some price inflation, stocks moved higher as oil demand indicated a thriving global economy.

Not much has changed. Even though comparatively lower gasoline prices give us a bit more spending money, rising unemployment is indicative of a still-weak global economy. Some analysts are saying that oil could fall to $50 a barrel.

*****China's still about the only country in the world that's growing. Its Purchasing Manager's Index rose for the 4th straight month. Current estimates are for a 7.8% GDP expansion this year. The U.S. will contract 2.7%, and that includes slight growth for the fourth quarter.

At SmallCapInvestor PRO, we've been ahead of the curve, adding Chinese stocks for the last two months. You can get our complete analysis on 4 top Chinese investments here.

*****Now, let's have a look at this week's economic data...

Wednesday, July 8, we get weekly crude oil inventories and the consumer credit report for May.

Thursday, July 9 we get weekly unemployment claims numbers and wholesale inventories for May.

Then on Friday, July 10, we get import and export prices along with the trade balance. We'll also be treated to a preliminary look at the Michigan Consumer Sentiment poll for July.

 

Acxiom Corp. (Nasdaq:ACXM), Ambac Financial Group, Inc. (Nasdaq:AKT) and Jackson Hewitt Tax Service Inc. (Nasdaq:JTX) are among the biggest percentage losers in Thursday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Alyst Acquisition Corp. (Nasdaq:AYA), Celldex Therapeutics Inc. (Nasdaq:CLDX), Encore Bancshares Inc. (Nasdaq:EBTX), Republic Airways Holdings Inc. (Nasdaq:RJET), Chemgenex Pharm Depository Receipt (Nasdaq:CXSP) and Old Second Bancorp Inc. (Nasdaq:OSBC).

EarthLink Inc. (Nasdaq:ELNK), Children's Place Retail Stores Inc. (Nasdaq:PLCE) and A Power Energy Generation Systems Ltd. (Nasdaq:APWR) are among the most actively traded companies in Wednesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Canadian Solar Inc. (Nasdaq:CSIQ), Century Aluminum Co. (Nasdaq:CENX), Republic Airways Holdings Inc. (Nasdaq:RJET), Spectrum Pharmaceuticals Inc. (Nasdaq:SPPI), AgFeed Industries Inc. (Nasdaq:FEED) and James River Coal Co. (Nasdaq:JRCC).

Stocks are higher Thursday afternoon, bolstered by fresh economic and corporate data.

At 12:21 pm ET, the Russell 2000 (NYSE:IWM) is up 10.18, or 2.39%, at 436.70, while the Dow is up 1.28% at 7,849.37 and the S&P 500 is up 1.34% at 824.76.

Investor sentiment was buoyed after Treasury Secretary Timothy Geithner unveiled a financial system plan before the House Financial Services Committee today to outline the Obama administration's proposal for extensive overhaul of financial regulations.

Small caps climbing higher today include Republic Airways Holdings (Nasdaq:RJET), which is up almost 40% on higher-than-average volume.

******Former Czech Prime Minister and European Union President Topolanek called the U.S. economic stimulus plan “a road to Hell.” He claims the Fed, Treasury and Administration of repeating the mistakes of the 1930s that sent the United States into the Great Depression.

Also attacked were the stimulus bill’s supposedly “protectionist” policies.

Now, as much as we may criticize our government’s plans, I’m a little defensive when we get flak from an E.U. president. Especially one that just lost a no-confidence vote and was removed from power in his own country. You know what they say about people in glass houses.

Topolanek no longer speaks for his own country. And apparently, he doesn’t speak for the E.U., either. European leaders were out in force trying to minimize the damage their Union president’s comments may have caused.

*****Final GDP numbers from Q4 2008 are in, and they’re essentially in line with the preliminary estimates. That’s being taken as good news in the stock market, index futures rallied on the news.

The economy shrank at a 6.3% annualized rate. The preliminary number was 6.2%. Economists are expecting Q1 2009 GDP to be in the range minus 5% to 6%. That’s something of an improvement and should be bad news as long as . . .

Hallwood Group Inc. (Nasdaq:HWG), Blount International Inc. (Nasdaq:BLT) and Dynamic Materials Corp. (Nasdaq:BOOM) are among the new 52-week lows in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Gulf Island Fabrication Inc. (Nasdaq:GIFI), Republic Airways Holdings Inc. (Nasdaq:RJET), Ship Finance International Ltd. (Nasdaq:SFL), Sandy Spring Bancorp Inc. (Nasdaq:SASR), Fisher Communications Inc. (Nasdaq:FSCI) and Clearwater Paper Corp. (Nasdaq:CLW).

Par Pharmaceutical Companies Inc (Nasdaq:PRX), Ship Finance International Ltd (Nasdaq:SFL) and Dynamic Materials Corp (Nasdaq:BOOM) are among the biggest percentage losers in Tuesday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Young Innovations Inc (Nasdaq:YDNT), Republic Airways Holdings Inc (Nasdaq:RJET), Skywest Inc (Nasdaq:SKYW), Emeritus Corp (Nasdaq:ESC), Investors Title Co (Nasdaq:ITIC) and Genesco Inc (Nasdaq:GCO).

Targanta Therapeutics Corp. (Nasdaq:TARG), Aladdin Knowledge Systems Ltd. (Nasdaq:ALDN) and Republic Airways Holdings Inc. (Nasdaq:RJET) are among the biggest percentage gainers in Thursday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Jackson Hewitt Tax Service Inc. (Nasdaq:JTX), CPI International Inc. (Nasdaq:CPII), Peapack Gladstone Financial Corp. (Nasdaq:PGC), Renaissance Learning Inc. (Nasdaq:RLRN), Northrim BanCorp Inc. (Nasdaq:NRIM) and Zygo Corp. (Nasdaq:ZIGO).

Here are the biggest percentage gainers among small caps:

Hot Topic, Inc. (Nasdaq:HOTT), Republic Airways Holdings Inc. (Nasdaq:RJET) and Mothers Work Inc. (Nasdaq:MWRK) are among the biggest percentage losers in Wednesday's trading among companies with market capitalizations under $1 billion.           

Also included among the results: Met-Pro Corp. (Nasdaq:MPR), PowerSecure International Inc. (Nasdaq:POWR), Gateway Financial Holdings Inc. (Nasdaq:GBTS), Transcat Inc. (Nasdaq:TRNS), Integral System Inc. (Nasdaq:ISYS) and Innovative Solutions and Support Inc. (Nasdaq:ISSC).     

Here are the biggest percentage losers among small caps:  

Noble International (Nasdaq:NOBL), Susser Holdings Corp. (Nasdaq:SUSS) and TXCO Resources Inc. (Nasdaq:TXCO) are among the biggest percentage gainers in Thursday's trading among companies with market capitalizations under $1 billion.         

Also included among the results: McCormick & Schmick's Seafood Restaurants Inc. (Nasdaq:MSSR), Medifast Inc. (Nasdaq:MED), ENGlobal Corp. (Nasdaq:ENG), Republic Airways Holdings Inc. (Nasdaq:RJET), Mediacom Communications Corp. (Nasdaq:MCCC) and 1-800-Flowers.com Inc. (Nasdaq:FLWS). 

Here are the biggest percentage gainers among small caps:     

MTS Medication Technologies Inc (Nasdaq:MPP), Republic Airways Holdings Inc (Nasdaq:RJET) and Provident Bankshares Corp (Nasdaq:PBKS) are among the new 52-week lows in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Apex Silver Mines Ltd (Nasdaq:SIL), Benihana Inc (Nasdaq:BNHNA), Old Second Bancorp Inc (Nasdaq:OSBC), First M&F Corp (Nasdaq:FMFC), Cathay General Bancorp (Nasdaq:CATY) and Sandy Springs Bancorp Inc (Nasdaq:SASR).

Here are the new 52-week lows among small caps:

Republic Airways Holdings Inc. (Nasdaq:RJET) are losing altitude after the regional airline operator announced that it terminated its agreement with Frontier Airlines Holdings, Inc. (Nasdaq:FRNTQ), which is in the midst of bankruptcy proceedings. Republic reported it will file a $260 million damage claim against Frontier in its bankruptcy case.

In Wednesday morning trading, RJET shares are diving 18.6%, or $3.34, at $14.62. For detailed price information and recent news stories about Republic Airways Holdings, click RJET. 

The Russell 2000 (NYSE: IWM) and the Dow are deep in negative territory on news of liquidity problems at Bear Stearns.

At 12:23 p.m. ET, the small-cap index had shed 14.42 points, or 2.12%, to 665.29. The Dow Jones Industrial Average (INDU) was down 177.96 points, or 1.47%, to 11,967.78.

The bears are running the show on news shortly after the opening that brokerage house Bear Stearns (NYSE: BSC) has seen its cash position deteriorate significantly over the past 24 hours, necessitating emergency short-term financing from J.P. Morgan Chase & Co. (NYSE: JPM) and the New York Federal Reserve.

Bear Sterns has been among the financial companies most severely affected by the meltdown in the subprime mortgage sector.

In economic news, the University of Michigan reported after the start of trading that its preliminary index of consumer confidence fell to 70.5 in early March from 70.8 in February. Economists were expecting to see a steeper decline.

With stocks falling, shares of airline companies are leading the descent.

The Russell 2000 (NYSE: IWM) is firmly in negative territory midway through the session. At 1:49 p.m. ET, the small-cap index was down 14.59 points, or 2.13%, to 669.15. The Dow Jones Industrial Average (INDU) had lost 120.89 points, or 0.99%, to 12,134.10.

The bears are running the show on news that residential mortgage lender Thornburg Mortgage Inc. (NYSE: TMA) and investment company Carlyle Capital Corp. Ltd., which has made residential mortgage-backed securities, have failed to meet margins calls.

A “margin call” is when banks call in their loans to investors, who are in turn forced to sell off assets to raise cash, leading to a reduction in the price of those assets and more margin calls and losses.

Separately, a report by the U.S. Labor Department before the start of trading showed that jobless claims for the week ended March 1 fell 24,000 to 351,000, from an upwardly revised 375,000 the preceding week. Economists were expecting to see a smaller decline.

However, the number of people receiving unemployment benefits increased 29,000 to 2.83 million, the highest level in two years.

With stocks small and large falling, shares of airline companies are leading the way down.

Among small-cap airlines, Indianapolis-based Republic Airways Holdings Inc. (Nasdaq: RJET) is flying at a lower altitude.

The airlines industry has suffered extreme turbulence since 9/11, from which it has not recovered. Toss in the rapidly rising fuel costs since the 2005 Gulf Coast hurricanes, and you have a double whammy smackdown that has brought many major carriers a trip through bankruptcy.
 
Frontier Airlines Holdings Inc. (Nasdaq: FRNT) and other smaller, regional carriers have fared better. But even with marketing tools such as 50 images of wildlife like grizzly bears, hares and wood ducks gracing the tails of its aircraft and the catchy slogan, “A whole different animal,” Frontier is having a bear of a time in keeping analysts from lumping it indiscriminately with some of its more troubled peers.
 
There are some changes in the air for Denver-based Frontier, however. CEO and President Jeff Potter announced last Thursday that he was resigning, effective September 6, to take another chief executive position outside of the airline industry. The next day Frontier's stock rose nearly 4% to $5.22, lifting the price from the $5.00 52-week low earlier in the week. A few days before that, Sam Addoms, company chairman and co-founder, said he planned to retire at the same time, when Frontier holds its annual shareholders’ meeting. Potter, 47, who rose through the ranks at Frontier, will remain on the company’s board.

Analysts had a neutral to negative view of Frontier before it reported results on July 26 for the quarter ended June 30, the first period in its fiscal 2008 year, and it doesn’t appear as if that report swayed their opinion. The company posted a net loss of $3.5 million, or $0.10 a share, compared with a profit of $4 million, or $0.10 a share, in the same quarter a year earlier. Still, sales grew 13% to $344.8 million.
 
Maybe industry observers need to lighten up, because Frontier is – lightening up, that is. As fuel costs continue to rise, seemingly without a pause, Frontier is in the midst of swapping out the seats in its youthful fleet of Airbus jets with a lighter variety. The company estimates that it can save $5.4 million a year in fuel costs with the switch – and it’s going to be able to add four seats to each plane. Of course, there’s a capital expenditure for the project, which cost it $1.4 million in the quarter in accelerated depreciation costs.