4. Allegiant Travel (ALGT) is a regional air carrier, flying passengers from smaller cities that have little service from other airlines, to leisure destinations including Las Vegas, Phoenix, Ariz., and Orlando, Fla. The company is headquartered in Las Vegas and the stock is rated a B-plus (Good) by TheStreet Ratings.
First-quarter net income was $22.6 million, or $1.12 per share, down from $28.2 million, or $1.37 per share, during the first quarter of 2009. The company blamed a 72% increase in fuel costs for the decline in earnings.
Allegiant paid a special one-time dividend of 75 cents a share on June 2. The company does not regularly pay dividends.According to Bank of America Merrill Lynch analyst Glenn Engel, whose firm reinstated coverage of Allegiant's stock on June 2, Allegiant has "the lowest unit costs among airlines," more than 20% lower than AirTran Holdings (AAI) and Southwest Airlines (LUV.). Allegiant keeps costs low by flying older planes than most other carriers, and also is described by Engel as an "early unbundler," generating "more fees per passenger than any other airline." Although the company has remained profitable with industry-leading margins in such challenging economic conditions, Engel is neutral on the shares, citing "above average oil sensitivity" and risks associated with expansion. His twelve-month target for the Allegiant's shares is $58, or 16% above Friday's closing price of $50.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV