Update On Previous Picks – Staples, Casey’s and Republic Airways

Looking back on previous picks for this year so far, we have a bit of a mixed bag. These picks were Staples ($SPLS), Casey’s General Stores ($CASY) and Republic Airways Holdings ($RJET).

Lets start off with Staples, which was my pick back in January. This stock has been a disappointment since I made the pick when they were 13.83. I felt that the market was going to buy into the fact they were the 2nd largest e-commerce site in the world behind Amazon now. I thought this would also be reflected in the earnings, but at the time it was not. After Office Depot reported, they dropped down in the $11 range. When time for their own earnings was coming up, the price started to rise up back to $13. Unfortunately when they reported earnings they dropped back in the $11 range again.

I still feel they are a long-term play and will rise again, but you may have to hold on for a while to see it finally come to fruition. Analysts that are covering the stock also believe that it has a good shot at getting really good gains and with the dividend, it makes it attractive as well. So I see this as a buying opportunity to load up on more cheap shares. Several have a price target around $15, so that would be close to a 40% gain from the current price.

Then we have Casey’s General Stores. When I suggested them at 67.13, they stayed in a range right around that price not varying by more than a dollar or two. That was until they released their earnings report on the 9th of June and that’s when they rose to 75.12 on the 10th. That was good enough to get an almost 11% gain from when I suggested it.

They had good sales growth in all sectors of their business that beat their expectations of where they wanted to be. They have strong goals for the next year, and if they can meet it they continue to have quite a bit more upside. Several analysts are looking for a price to eventually be in the $80+ range.

Finally, we have Republic Airways Holdings. They have been on a bit of a roller coaster ride. When I suggested them on February 27th, they were at $9.58. Then after that they eventually dropped down to a low of $7.97 on April 14th. Hopefully you used that as an opportunity to buy some more shares cheap as they eventually went as high as $11.18 on June 9th.

They’ve seen their air traffic increase by 15% in May and recently an analyst raised their price target to $17 from their previous $13 target. So things are looking up if you continue to hold on to the shares.

From the period of my suggestion, to their most recent high on the 9th, they have gained almost 17%. Not too shabby.

I will update soon with some more stocks to take a look at. Happy investing!

Republic Airways Holdings ($RJET) – Stock pick for 2-27-14

rjet logo

Republic Airways Holdings Inc., through its subsidiaries, provides scheduled passenger services. It offers scheduled passenger service on approximately 1,300 flights daily to approximately 110 cities in the U.S., Canada, and the Bahamas through fixed-fee flights operated under airline partner brands, including American Eagle, Delta Connection, United Express, and US Airways Express.

Today they reported fourth quarter 2013 income from continuing operations of $16.5 million, or $0.30 per diluted share, compared to $8.8 million, or $0.17 per diluted share from continuing operations in the prior year. Net income increased 23.8% to $15.6 million for the fourth quarter of 2013, compared to $12.6 million in the same period in the prior year. Operating revenues for the quarter increased 5.8% to $346.5, million compared to $327.4 million for the fourth quarter of 2012.

Full year income from continuing operations increased 54.3% to $48.3 million, or $0.92 per diluted share, compared to $31.3 million, or $0.63 per diluted share for the full year 2012.

They did report, due to weather issues across the country in January and February, they had a dip in revenue for the current quarter. However, that should be just a temporary dip as they have been growing quite well, as the numbers above show.

According to analysts following the stock, they expect the stock to rise to anywhere from $12.50 – $15. Options activity show calls being bought at a 4 to 1 clip over puts which is a bullish sign. Their price to book ratio sits below 1 at .81 which means they are undervalued in share price. Institutional investors also bought up 1.8 million shares in the previous quarter.

Checking with my Prophet tool from TD Ameritrade, a bullish chart pattern is showing and it expects a future price range from $12.65-$14.14 in the near future as seen below.

rjet

If the price does meet the targets predicted by the tool, that would be an expected gain of 32% to 47% in that range at a current price of $9.58. Per the analysts range, you would look at a 30% – 57% gain at the same current price.

As long as Republic Airways can continue to build on the business and continue to do a great job like they did last quarter, they should have no problem in growing share price. With that sort of upside, I see them as an excellent pick.