Why Republic Airways Holdings Inc. Shares Took Off Today

Is this meaningful? Or just another movement?

May 1, 2014 at 4:55PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Republic Airways Holdings (NASDAQ:RJET) have gained 9% today after topping out with a gain of nearly 12% over yesterday's closing price in early afternoon trading. The regional airline reported strong earnings for the first quarter, in spite of (or perhaps due to) thousands of cancellations as a result of inclement weather, and also gave its earnings guidance a major upgrade.

So what: Republic's quarterly operating revenue rose 4% year over year, to reach $337.5 million, while available seat-miles rose 6%, to nearly 3.4 billion. Canceling more than 12,400 flights during the quarter (a 145% increase from the year-ago quarter), primarily because of bad weather, left Republic with a mere 0.7% uptick in quarterly departures, to 103,349; but its earnings nonetheless rose to $0.26 per share, which was well ahead of the $0.17 in EPS expected by analysts.

Republic also updated its full-year guidance, projecting its 2014 revenue in a range of $1.35 to $1.4 billion and its EPS in a range of $1.20 to $1.40, which is quite a bit above the old $0.90 to $1.20 range. Analysts had expected $1.4 billion in annual revenue, but only $1.12 in EPS, so this is a nice surprise to the upside for investors.

Now what: Republic's new estimate would bring 2014's full-year earnings up to a level not touched since the end of the financial crisis, when the airline regularly reported a much higher EPS than it does today. Republic shareholders have waited a long time for the company to return to its pre-recession strength, and today's report is indeed an indication that it's making progress. However, it's worth keeping in mind that Republic's valuation remains elevated above its historical average, and it's possible that investors could be getting ahead of themselves with optimism for a company that operates in a notoriously unprofitable part of the American economy. There could be opportunity here, but do your homework to ensure that your investment doesn't stall out on the runway.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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