SkyWest, Inc., through its wholly owned subsidiary, SkyWest Airlines Inc., operates regional airlines in the United States. For the 6 months ended 9/30/00, revenues increased 15% to $269M. Net income increased 16% to $34.4M. Revenues reflect competitors eliminating and reducing scheduled service in the San Francisco and LA markets. Net income reflects decreased maintenance expense and commissions on United Express contract.

December 3, 2000

High fuel prices and consumer disgust with labor problems apparently have not hurt SkyWest, which just keeps soaring. The Company operates under the familiar names of Delta Connection and United Express, as it provides "feeder" flights for its larger partners. SkyWest reported a 10.4% increase in revenue passenger miles for October. The good news has helped the stock climb to new highs. A 2:1 split announcement on November 8th may also be contributing to the stock's nice move. We are banking on the fact that SkyWest is in the middle of a split run, with the split payable date of December 15th rapidly approaching. SKYW established a new high of $60.69 this week, which should prove to be light resistance for the stock. We see support at the 20-DMA, currently at $56.28. We have set our stop just below this support at $56.00. Amazingly, despite the string of recent new highs, the MACD just turned positive. This is a good sign that the consolidation within the up trend has ended and the stock is ready to stage another advance. We also like the OBV and the Money Flow, both of which are very strong. If we are not stopped out, either through our current stop, we plan on exiting this position just before the split is paid.

December 7, 2000

The shares of SkyWest suffered from a double-whammy of bad news today. Brokerage concern Raymond James cut its rating on the company to "buy" from "strong buy" and President Clinton introduced an executive initiative today to change the way that the FAA runs the air traffic system that will likely result in increased fees paid by airlines. The result was us getting stopped out at $54.50, $1.50 below our stop price of $56.00, because the stock sold off hard at the open. Needless to say, it will be some time before we consider SkyWest as play material again.

Picked on November 30th @ $59.50
Profit/Loss -5.00 (8%) (Stopped Thursday @ $54.50)
Best Profit +0.41 (1%)

December 5, 2000

This regional air carrier took a small break from its recent ascent. The failure to make another new high today despite the unprecedented NASDAQ advance is understandable when one notices that the bulk of today's cash was flying into beaten down technology shares. The good news for SkyWest is that oil prices eased a few dollars this week. Declining fuel prices can only help the earnings picture for SkyWest. We think there is a strong possibility that the stock can continue its advance due to a pending split. The 2:1 split, which was announced on November 8th, will be paid to shareholders on December 15th. The stock has successfully tested a rising 10-DMA over the past two days. This trendline is providing support at $57.78. SkyWest's stock has one of the strongest Money Flows in the market, which is another good sign that the advance could continue. OBV is also noticeably strong. The RSI did issue an overbought signal a couple of days ago, but has since backed off. If we are not stopped out of this play, we intend to exit just before the split payable date.