onyx1 Posted September 11, 2013 Share Posted September 11, 2013 The branded carrier (Frontier Airlines) half of this holding company is going to receive a huge tailwind from lower oil prices in the sweetest time of the year for air travel. The Fixed Fee business will continue to enjoy their CPA contract cashflows out at least 6 years. At current jet fuel prices, I estimate annual FCF at $2.90/share. Not bad for a comapny offered at $3.60/share. At 10% higher fuel, I see FCF at $1.60/share. Sold the last of my shares today. At $12.25 and up over 300% in two years, RJETs share price now represents something close to fair value. Although the exceptional management team tempts me to continue to hold on for more (and to delay the tax burden), the fact is that the business is plagued with drawbacks like labor issues and capex requirements. It will never be a high quality business. A triple+ on what was originally a 13% position, this well run company has been a great learning experience and has made a meaingful impact on my net worth. Link to comment Share on other sites More sharing options...
gurpaul88 Posted September 11, 2013 Share Posted September 11, 2013 Congrats! Link to comment Share on other sites More sharing options...
17thstcapital Posted September 11, 2013 Share Posted September 11, 2013 At $12.25 and up over 300% in two years, RJETs share price now represents something close to fair value. Although the exceptional management team tempts me to continue to hold on for more (and to delay the tax burden), the fact is that the business is plagued with drawbacks like labor issues and capex requirements. It will never be a high quality business. Congrats on your trade - way to stick with it when there were few believers. It's also been one of my largest holdings and continues to be. However, I have to disagree with your fair value comment. I think there's still a lot more room for this stock to run. I can easily see $2.50 in EPS here, and maybe even $3.00/sh, in the not so distant future. Apart from Frontier catalyst which may be priced it, there's a possibility of a dividend and/or buyback and that is not reflected in the current valuation. Also not priced in is the FCF from the new contracts and the restructurings. Add to this, the very large NOL balance. Net net: this continues to be one of my favorite event driven names where my fair value is closer to 20 and I'll stick around for now to see how all this plays out...... Link to comment Share on other sites More sharing options...
onyx1 Posted September 12, 2013 Share Posted September 12, 2013 At $12.25 and up over 300% in two years, RJETs share price now represents something close to fair value. Although the exceptional management team tempts me to continue to hold on for more (and to delay the tax burden), the fact is that the business is plagued with drawbacks like labor issues and capex requirements. It will never be a high quality business. Congrats on your trade - way to stick with it when there were few believers. It's also been one of my largest holdings and continues to be. However, I have to disagree with your fair value comment. I think there's still a lot more room for this stock to run. I can easily see $2.50 in EPS here, and maybe even $3.00/sh, in the not so distant future. Apart from Frontier catalyst which may be priced it, there's a possibility of a dividend and/or buyback and that is not reflected in the current valuation. Also not priced in is the FCF from the new contracts and the restructurings. Add to this, the very large NOL balance. Net net: this continues to be one of my favorite event driven names where my fair value is closer to 20 and I'll stick around for now to see how all this plays out...... :) Glad you held on as well! BB & Co. are the best in the business and it wouldn't suprise me see additional CPA contracts since their EMB option brings them to the front of the line for 53 very much in demand 70-seat jets. Once F9 is out of the picture (maybe this week?), it will be a full court press on the regional side of the business. Best of luck! Link to comment Share on other sites More sharing options...
Cunninghamew Posted December 4, 2013 Share Posted December 4, 2013 Some good comments from the VIC board: It has been 1 year since our write-up and the stock has doubled. But we actually have more conviction today than we did back then. And on top of that - the market is completely missing the story here. The company crushed Q3 consensus earnings and announced a long-awaited divestiture... and the stock is down from roughly $12/shr to $10/shr! We think this stock is worth $18/shr and will get there in less than a year. After successfully restructuring Chautauqua, RJET signed the largest contract in the company's history by agreeing to operate 50 jets for AMR, gradually receiving the new aircraft over 18 months from mid-2013 to early-2015. And, as announced last week, RJET will officially divest Frontier by month end and become a growing, pure-play, stable, well-positioned fixed-fee operator that will not pay any taxes for at least 10 years. The new CPA with AMR has produced a ramp in RJET profits. We expect 2014 pre-tax earnings of $2.60/shr, whereas sell-side analysts continue to ignore the fact that RJET is not a taxpayer and value the company off of GAAP earnings estimates of $1.00-$1.25/shr. Not only is an after-tax estimate meaningless for this company, but the estimates are too low even if one chose to tax earnings. So we expect, just as we saw on 12/31/12, that RJET will at some point release 2014 earnings guidance that is nicely above consensus. We conservatively value those earnings (which are growing to $3.00/shr pre-tax in 2015) at 7x for a stock price above $18. In addition, CEO Bryan Bedford has referenced several times on earnings calls the fact that RJET is in very good position to bid on and win new CPA agreements. So there might be more profit growth beyond the $3.00/shr in 2015 pre-tax earnings. The other misperception on the street that could prove to be a huge driver of the stock higher is the balance sheet. As explained above in our write-up, the debt on RJET's balance sheet is basically non-recourse. The servicing of the debt flows through the CPA agreements, and RJET is protected from early termination of contracts with make-wholes and put options (for example, putting the jets to Delta). For that reason, management appears to view its balance sheet as having net unrestricted cash of $275m (pro forma for closing of Frontier sale). We believe management could consider a big buyback and/or a large regular dividend. To put this in perspective, RJET could repurchase 20% of its market cap with a mere $100m buyback program, still leaving plenty of cash on the balance sheet for other purposes. A dividend from the ongoing FCF of the business is also a good possibility. While most of the FCF in 2014 will be tied up in paying for the new jets that will be flown for AMR, RJET could choose to use a portion of its unrestricted cash balance to initiate a $1.00/shr regular dividend in 2014, and then use the ongoing FCF in 2015 and beyond to support and grow the dividend. At a 5% yield it would be a $20 stock. And we think that is fair for a stable (RJET has never reported a loss in earnings from its fixed-fee business... ever), growing stream of cash dividends. The caveat to the potential return of cash to shareholders is the need to reach a labor agreement with the company's pilots. The pilots are represented by the International Brotherhood of Teamsters and negotiations have not been smooth over the last few years. However, management sounded more optimistic on last week's earnings call than they've ever been about the prospects or reaching an agreement in the near/medium term. A big return of cash to shareholders could compromise negotiations with labor so a deal is necessary for this catalyst to play out. But even if we don't get a labor deal, we think 2014 numbers justify an $18 stock price and 2014 guidance will be the key catalyst. On the other hand, if a labor agreement is reached and management feels free to allocate capital to shareholders, our view is the upside is in the 20's. Link to comment Share on other sites More sharing options...
phil_Buffett Posted December 4, 2013 Share Posted December 4, 2013 Some good comments from the VIC board: It has been 1 year since our write-up and the stock has doubled. But we actually have more conviction today than we did back then. And on top of that - the market is completely missing the story here. The company crushed Q3 consensus earnings and announced a long-awaited divestiture... and the stock is down from roughly $12/shr to $10/shr! We think this stock is worth $18/shr and will get there in less than a year. After successfully restructuring Chautauqua, RJET signed the largest contract in the company's history by agreeing to operate 50 jets for AMR, gradually receiving the new aircraft over 18 months from mid-2013 to early-2015. And, as announced last week, RJET will officially divest Frontier by month end and become a growing, pure-play, stable, well-positioned fixed-fee operator that will not pay any taxes for at least 10 years. The new CPA with AMR has produced a ramp in RJET profits. We expect 2014 pre-tax earnings of $2.60/shr, whereas sell-side analysts continue to ignore the fact that RJET is not a taxpayer and value the company off of GAAP earnings estimates of $1.00-$1.25/shr. Not only is an after-tax estimate meaningless for this company, but the estimates are too low even if one chose to tax earnings. So we expect, just as we saw on 12/31/12, that RJET will at some point release 2014 earnings guidance that is nicely above consensus. We conservatively value those earnings (which are growing to $3.00/shr pre-tax in 2015) at 7x for a stock price above $18. In addition, CEO Bryan Bedford has referenced several times on earnings calls the fact that RJET is in very good position to bid on and win new CPA agreements. So there might be more profit growth beyond the $3.00/shr in 2015 pre-tax earnings. The other misperception on the street that could prove to be a huge driver of the stock higher is the balance sheet. As explained above in our write-up, the debt on RJET's balance sheet is basically non-recourse. The servicing of the debt flows through the CPA agreements, and RJET is protected from early termination of contracts with make-wholes and put options (for example, putting the jets to Delta). For that reason, management appears to view its balance sheet as having net unrestricted cash of $275m (pro forma for closing of Frontier sale). We believe management could consider a big buyback and/or a large regular dividend. To put this in perspective, RJET could repurchase 20% of its market cap with a mere $100m buyback program, still leaving plenty of cash on the balance sheet for other purposes. A dividend from the ongoing FCF of the business is also a good possibility. While most of the FCF in 2014 will be tied up in paying for the new jets that will be flown for AMR, RJET could choose to use a portion of its unrestricted cash balance to initiate a $1.00/shr regular dividend in 2014, and then use the ongoing FCF in 2015 and beyond to support and grow the dividend. At a 5% yield it would be a $20 stock. And we think that is fair for a stable (RJET has never reported a loss in earnings from its fixed-fee business... ever), growing stream of cash dividends. The caveat to the potential return of cash to shareholders is the need to reach a labor agreement with the company's pilots. The pilots are represented by the International Brotherhood of Teamsters and negotiations have not been smooth over the last few years. However, management sounded more optimistic on last week's earnings call than they've ever been about the prospects or reaching an agreement in the near/medium term. A big return of cash to shareholders could compromise negotiations with labor so a deal is necessary for this catalyst to play out. But even if we don't get a labor deal, we think 2014 numbers justify an $18 stock price and 2014 guidance will be the key catalyst. On the other hand, if a labor agreement is reached and management feels free to allocate capital to shareholders, our view is the upside is in the 20's. sounds very interesting! thank you :) Link to comment Share on other sites More sharing options...
phil_Buffett Posted December 7, 2013 Share Posted December 7, 2013 i bought yesterday a first Position. lets see what they do with the cash from the frontier sale. Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 21, 2014 Share Posted January 21, 2014 hopefully they will get a good Labor deal soon and then will suprise with a great earnings guidance. also a Little Special dividend or a regular dividend or a buyback with the excess cash of the frontier sale. Link to comment Share on other sites More sharing options...
xtreeq Posted February 14, 2014 Share Posted February 14, 2014 Republic Airways Reaches Tentative Agreement with Its Pilot Union http://phx.corporate-ir.net/phoenix.zhtml?c=131107&p=irol-newsArticle&ID=1900283 Link to comment Share on other sites More sharing options...
phil_Buffett Posted February 14, 2014 Share Posted February 14, 2014 stock down more and more the last time. i bought more. Link to comment Share on other sites More sharing options...
Cunninghamew Posted February 14, 2014 Share Posted February 14, 2014 stock down more and more the last time. i bought more. ditto Link to comment Share on other sites More sharing options...
phil_Buffett Posted April 9, 2014 Share Posted April 9, 2014 http://www.streetinsider.com/Management+Comments/Republic+Airways+Holding,+Inc.+(RJET)+Approves+$75M+Capital+Return+to+Shareholders/9356947.html Link to comment Share on other sites More sharing options...
phil_Buffett Posted April 9, 2014 Share Posted April 9, 2014 for me the stock at the 52week low is too much Panic. no Labor deal, the market assumes the Company is not good to invest. good for rjet that they can buyback stock at the low Price. i buy more at These levels Link to comment Share on other sites More sharing options...
yadayada Posted April 9, 2014 Share Posted April 9, 2014 any kind of moat here? im looking at all fcf figures. they generated mored then 1 bn in free cash after investing since 2003. net investing was about 1bn as well. yet debt load gre by 1.6 bn$ here. they bought back 200million $ in shares. what am i missing here? Link to comment Share on other sites More sharing options...
phil_Buffett Posted April 9, 2014 Share Posted April 9, 2014 any kind of moat here? for me not direct. they are operating as a regional Airline Company. so they are not tied up to customer traffic and so on. if there are only 5 persons in the airplane the generate as much as with a full airplane. the have Long term contracts. they got a lot of cash from their frontier Airline sale. and nobody´s know´s them and nobody´s know the true earnings power. you can read all the article´s about the Company on value Investors Club, if you have a account. there are also very good arguments in the comment sector. Link to comment Share on other sites More sharing options...
yadayada Posted April 9, 2014 Share Posted April 9, 2014 what am i missing? 200m to shzreholders, 3.5bn$ from net cash and debt and net 1bn went int investing section. so where did that 2.3bn $ go? this is since 2003. is this some weird accounting thing im not aware of? from 2006to 2007 they increased debt more then 300m$ but i see nothing of that in the financing section in cash flow statement. that is kinda confusing, i thought i understood how this works :) So basicly it says they have been paying off debt. from the VIC write up: From a balance sheet perspective, RJET can be fairly misleading. The consolidated balance sheet appears to be highly leveraged with $2.2b in total debt against a market cap of $218m. However, the vast majority of the debt is collateralized by jets and principal payments are funded by the branded carriers. How much debt do they really have then? Why is this on their balance sheet and not on the airlines balance sheet? And if you look at free cash flow, what will capital expenditures be? Their net cash from operations is probably a bit over 200 million on average right? And capital exp seem v lumpy. What would enterprise value of this thing be? Link to comment Share on other sites More sharing options...
yadayada Posted April 10, 2014 Share Posted April 10, 2014 also einhorn sold his stake in february I think. Very hard to gauge what exactly their earning power is, and when shareholders will get the enjoy the share in that nice FCF. And I am buying against Einhorn. I doubt he would just sell it, especially if there is such potential for a double or triple here. Link to comment Share on other sites More sharing options...
phil_Buffett Posted April 11, 2014 Share Posted April 11, 2014 what am i missing? 200m to shzreholders, 3.5bn$ from net cash and debt and net 1bn went int investing section. so where did that 2.3bn $ go? this is since 2003. is this some weird accounting thing im not aware of? from 2006to 2007 they increased debt more then 300m$ but i see nothing of that in the financing section in cash flow statement. that is kinda confusing, i thought i understood how this works :) So basicly it says they have been paying off debt. from the VIC write up: From a balance sheet perspective, RJET can be fairly misleading. The consolidated balance sheet appears to be highly leveraged with $2.2b in total debt against a market cap of $218m. However, the vast majority of the debt is collateralized by jets and principal payments are funded by the branded carriers. How much debt do they really have then? Why is this on their balance sheet and not on the airlines balance sheet? And if you look at free cash flow, what will capital expenditures be? Their net cash from operations is probably a bit over 200 million on average right? And capital exp seem v lumpy. What would enterprise value of this thing be? i didnt do that much work than you. i was too lazy :D and just read all the stuff from vic and the comment section. and some blog on the Internet and find it a good idea. so shame on me ;D Link to comment Share on other sites More sharing options...
phil_Buffett Posted May 24, 2014 Share Posted May 24, 2014 http://phx.corporate-ir.net/phoenix.zhtml?c=131107&p=irol-newsArticle&ID=1924629&highlight= they buying back stock and earnings are rising. Little steps. but for me the Company is big undervalued. the have so much NOL´s and high pre tax income in comparison to market cap. http://www.midwestairlines.com/~/media/Files/IR/Presentations/5%2020%2014%20Investor%20Presentation%20-%20Final.ashx here the last shareholder presentation Link to comment Share on other sites More sharing options...
phil_Buffett Posted September 18, 2014 Share Posted September 18, 2014 today up nice 10% :) http://www.benzinga.com/analyst-ratings/analyst-color/14/09/4859092/update-bank-of-america-reiterates-on-republic-airways-ho?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+benzinga+(Benzinga+News+Feed) Link to comment Share on other sites More sharing options...
phil_Buffett Posted September 19, 2014 Share Posted September 19, 2014 i sold my stake today for a nice 40% Profit. i sold because i see elsewhere more upside. i bought more AIQ Link to comment Share on other sites More sharing options...
Cunninghamew Posted July 27, 2015 Share Posted July 27, 2015 Curious, if anyone still follows this name. Back to ground zero Market is acting like company is potentially no-longer a going concern. I guess now that the company has yanked analysts ability to handicap earnings power people just decided to sell this down to about cash per share. I have no clue how to handicap their ability to get a new labor agreement (and it doesnt appear to be on the near-term horizon), but at these levels they payoff looks pretty lopsided. Remember that the big debt load you see is essentially mortgages secured by planes Link to comment Share on other sites More sharing options...
yadayada Posted July 27, 2015 Share Posted July 27, 2015 I remember this comment on the same industry from Kyle bass. I think it was the union making ridicilous demands causing his investment to tank in the end. Basically they demanded pay that would cause the investors to make a loss, and the whole thing went under in the end. So Im not sure you can really count on them to act rational in everyone's interest. Just a casual observation Link to comment Share on other sites More sharing options...
xtreeq Posted February 27, 2016 Share Posted February 27, 2016 Republic Airways Holdings Inc. and Subsidiaries File for Chapter 11 Reorganization https://www.sec.gov/Archives/edgar/data/1159154/000115915416000173/final-pressrelease3.htm Link to comment Share on other sites More sharing options...
muscleman Posted March 24, 2016 Share Posted March 24, 2016 Does anyone understand what's going on here? I've never seen a company filing ch 11 and still trading at above $1 per share. https://www.sec.gov/Archives/edgar/data/1159154/000135445716000328/xslF25X02/primary_doc.xml Does this mean OTC trading or going dark? I think as long as they have over 99 shareholders, they have to trade on OTC instead of going dark right? Link to comment Share on other sites More sharing options...
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