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You are correct. Dominion can dilute us by over 2.5 million shares if they want to next week. They have that option per the agreement
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Why UTA is Outperforming CTRP
http://seekingalpha.com/instablog/814251-natty-greene/126168-why-uta-is-outperforming-ctrp
Looked like an AON market order as entire block went at the ask, $.1798
Quick response for now because I'm slammed today, but more detailed to come...
Yes, UTA's business is seasonal with Q3 & Q4 always being the two strongest quarters and Q1 weakest followed by Q2. It corresponds to the holiday seasons in China and peak travel.
So, no you should not expect $2.00 in 2011, but something in the $1.60-$1.70 range (barring any more accretive acqusitions) which very well could happen with the $56 million on balance sheet.
I expect margin improvement in 2011 and more accretive acqusitions to provide a positive environment for new analyst coverage and a valuation that is closer to $15.
I always use these last few days of year to look for bargain sells due to tax loss selling and JADA is the #1 on my buying list because of this deep plunge post Q3 numbers and subsequent selling combined with tax loss selling.
On the CGS index, JADA is the most likely 3-bagger of the bunch in 2011 if you buy right here at $.14-$.145 price.
Yes, UTA is my top holding as I have closely followed the company since 2007 and have complete confidence in their growth strategy going forward based on my DD and correspondence with management. I have my largest position ever on right now for UTA becasue of what is to come in Q1 2011.
I am a buyer today ($.14-$.142) as I have walked the ailes of the marketplace of China stocks for blue light tax loss selling specials and found JADA to provide the best price on a risk/reward basis for a CGS index stock.
We are now at support levels thanks to tax selling and all it takes is one PR or anxious anticipation of Q4 earnings to put this right back in its pre Q3 trading range ($.36 - $.42) for a 3-bagger.
Holding my generous positions in UTA and CCME into new year too. Not selling either one until a 10 multiple is hit on 2011 earnings (UTA-$15 and CCME-$30).
Cheers and Happy New Year!
What a difference a year can make in UTA valuation.
At this time last year, 12/28/09, UTA was trading at $11.30 on the following Q3 (first nine months #s):
2009 (first nine months):
$63M revenue
$12.9 net income (adjusted)
$.86 EPS
23M cash
Share price (12/28/09): $11.30
Today, UTA is trading at $6.30, almost half price from last year on these #s:
2010 (first nine months):
$109M revenue
$17.1M net income (adjusted)
$.91 EPS
$56M cash
Share price (12/28/10): $6.30
And the icing on the cake is the 2010 full year guidance which will mean the following for Q4'10 and full year '10:
Q4 guidance:
$41M revenue
$10.1M net income
$.50 EPS
Full Year guidance (2010):
$150M revenue
$27.5M net income
$1.41 EPS (adjusted)
This is why I have made UTA my top holding and why the smartest, big money in travel sector, PAR Capital Management, has become UTA's largest institutional investor. We know value and cheap, high growth when we see it!
They are shorting China in general, don't take CCME personally.
Look at the annual high short interest in big names like CTRP. This is not just about CGS names.
Buy quality China growth, high cash, no debt names like CCME and UTA and the squeeze will come to you. CCME has a lot of room to grow in institutional ownership lagging UTA for example by half (22% to 11%). That is a good thing!
With UTA's relative underperformance YTD, -36%, there is a lot more left in this tank before year's end. 200DMA is within sights today at 6.79, chart looks great, insiders are buying and we picked up the most respected travel sector institutional investor as our largest holder.
Old article, but if you don't know about PAR Capital, below is a brief primer. They are the travel sector investment specialists and hold for multiyear, multibaggers buying at value prices. They are UTA's largest institutional investor (5% of company) and also call PCLN their largest holding in their $2 billion fund. They are also the second largest holder of Orbitz, third largest holder in United, and largest holder of Dollar Thrifty. UTA is their only China based travel pick in their portfolio.
Hedge Fund Has No Fear of Flying
Bull Market Report
Published 12/12/07
Value-focused hedge fund PAR Capital has been in business since 1990, and it has made a name for itself gaming the airline industry, correctly calling tops and bottoms to cycles for the past decade. At one point in mid-2006, PAR's portfolio was valued at $1.86 billion and half of its investments were in airline stocks.
The Boston-based firm's success investing in the airline business is not surprising. Founder Paul Reeder and portfolio manager Edward Shapiro are both former airline analysts. Robert Crandall, the retired CEO of AMR Corp. (AMR, $16.63, -1.18) is an investor. He had high praise for the pair earlier this year after PAR dumped airline stocks in late 2006 as the AMEX Airline Index (^XAL, 36.87, -1.73) ran to a three-year high.
"Shapiro and Reeder have done a hell of a job," Crandall told Bloomberg, saying that PAR posted an almost 30% gain before fees in 2006. "When you have smart people who are running money and have their own skin in the game, that is a good omen."
The firm has a long history of making good bets on the airline sector. In 2005, it helped to finance US Airways Group (LCC, $15.31, -2.28) as it exited from bankruptcy and merged with America West. PAR eventually invested a total of $265 million in US Airways, and a little more than two years later, it had cashed out of most of its holdings in the company for an almost 240% gain.
An examination of the PAR's most-recent quarterly filing by our colleagues at InsiderScore revealed that PAR was once again building up positions in airline stocks. At the end of the third quarter of 2007, PAR's U.S.-listed equity portfolio was valued at more than $1.54 billion, and the firm had increased its stakes in Northwest Airlines (NWA, $16.20, -1.51) and Allegiant Travel (ALGT, $32.86, -0.73), and took positions in AMR, Continental Airlines (CAL, $24.23, -2.55), AirTran Holdings (AAI, $8.05, -0.12), JetBlue Airways (JBLU, $6.25, -0.41), and Delta Air Lines (DAL, $15.74, -1.29).
Not surprisingly, the AMEX Airline Index had fallen -25% during the first nine months of 2007, including a -12% drop during the third quarter. The airline benchmark has shed another -20% since the end of the quarter.
The industry does face challenges. As even the most casual observer knows, fuel makes up a big part of the cost of running an airline, and oil prices are still near all-time highs. While the airlines use sophisticated hedges, record high oil prices will catch up with the firms eventually.
Another concern is that a slowing U.S. economy will impact air-passenger miles. The industry as a whole has been profitable since the second quarter of 2006, according to the Air Transport Association, but the combined headwinds of rising oil prices and a slowing economy will likely result in the airlines losing money in the current quarter.
Several big airlines said last week they were pulling back on capacity growth as a result to the twin headwinds. The move is designed to head off an overcapacity of seats; for the past mostly profitable year, the domestic carriers have been flying fully loaded planes around the country, which is the most profitable state in which for them to operate.
"We are concerned about growing evidence of slowing economic growth that would inevitably affect passenger demand, coupled with a surge in energy prices," said Gary Kelly, CEO of Southwest Airlines (LUV, $13.32, -0.28), in a statement last week.
It should be noted that PAR Capital doesn't just buy airline stocks, but it is very travel-industry focused. Its largest position at the end of 3Q07 was an outsized holding (14.6% of its portfolio) in Priceline.com (PCLN, $111.91, 1.67). We discussed Priceline.com as part of a look at e-travel sites in July, noting that the company was "considered to have a bright future as a push into overseas markets is starting to pay dividends." We liked the stock, but suggested looking for a dip; it happened not long after we posted our comment, as the stock slipped to the low $60s by early August. Since then, it's been up, up, and away for Priceline.
PAR Capital took advantage of the rise to book some profits during the quarter, but it has been an investor in the company for more than four years and has obviously kept a large position. PAR's second-largest holding is a modest stake in Google (GOOG, $699.35, 0.15), and the firm took a small stake in Priceline rival Orbitz Worldwide (OWW, $8.70, 0.14), which IPO'd in the third quarter of 2007. We examined the Orbitz IPO in August and were skeptical. Orbitz managed to rally in the late summer, but resumed slipping again by fall. The stock has lost more than -20% of its value since we profiled it.
PAR Capital clearly sees something that others don't, so are there opportunities here? We have to admit we find it difficult to identify a winner since we tend to be long-term oriented investors. The fundamentals of the airline business are very lumpy and conditions can turn lousy very quickly. It is a capital and labor-intensive business whose principal product -– a seat ticket -– is a commodity. Buyers shop almost exclusively on price. Once a lower-cost carrier drops its fares, the higher-cost competitors have no choice but to match a price cut or lose market share.
It's tempting to try to follow a smart sector player like PAR, but picking winners is tough. Unfortunately, or maybe fortunately, there isn't an airline sector ETF to use as a proxy for what PAR is doing. The closest thing is the iShares Dow Jones Transportation Average Index (IYT, $84.74, 0.31). Its airline exposure is actually pretty slim; it is more focused on railroads and shipping companies like FedEx (FDX, $97.97, 0.30).
If you were tempted to take a plunge, we'd look at a lower-cost carrier like a JetBlue over a legacy carrier like AMR. One might also look at a carrier like Delta that has cut costs through the bankruptcy process. Bear in mind that if you pick a carrier that fumbles the business again and heads to bankruptcy court for protection, you could lose your entire investment. We're not huge fans of the airline sector, but given PAR's impressive track record, we thought some subscribers may be able to put this information to good use.
UTA: Ownership summary
Shares outstanding: 19,898,235
Shares owned (by institutions & insiders): 11,429,803
Float: 8,468,432 (estimate)
Institutions (100K or more shares):
PAR, 990,000
Federated, 865,311
Renaissance, 485,375
FIL, 416,800
Currie, 326,300
Barclays, 261,124
Deutsche, 239,476
Technical, 180,591
Stafford, 122,350
Keane, 106,400
Insiders (20K or more shares):
CEO Jiang, 4,498,246
CFO Xie, 45,332
Director Zhang, 23,334
Individual (largest):
Valente, 2,041,400
UTA: 2nd largest institutionally sponsored name in CGS index
YONG: 34%
UTA: 22%
CCME: 11%
ZSTN: 11%
CCCL: 8%
LPH: 4%
NEP: 3%
TSTC: 3%
BSPM: 2%
AERL: 0
JADA: 0
As of 9/30/10
UTA's new 5% insitutional investor is not your average hedge fund.
PAR Capital is UTA's top institutional owner based on their new purchase of 5% stake or 990,000 shares now valued at $6,128,100.
http://www.nasdaq.com/asp/holdings.asp?symbol=PCLN&symbol=UTA&symbol=GU&selected=UTA&FormType=Institutional
PAR's investment in UTA is noteworthy because PAR is a $2.18 Billion value fund that specializes in the travel industry. They were founded in 1990 by two former airline analysts, Paul Reeder & Edward Shapiro, who previously worked for Loomis Sayles & Co. and Wellington Management.
They are known for taking a longer term, value-oriented view toward their investments as evidenced by their multi-year US Airways position (making them at one time the largest shareholder) bought for $19.53 and sold for $57.80 in 2007 for a 3-bagger.
PAR's top 5 holdings account for nearly half of their $2 Billion investments:
Priceline: $292M
United Airlines: $197M
Southwest Airlines: $177M
Orbitz: $155M
Expedia: $129M
http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=7558634&SessionID=BvvIH6ns4DgOJA7
PAR Capital are experts in this space and have a incredible track record. They tend to buy large positions at value prices and hold for multiyear, multibaggers. I suspect they invested in UTA at end of Sept during the big drop and will hold for a gain of a multiple of their purchase price.
What is very significant to me is not only the large investment in UTA, but the fact that PAR has NOT invested in any other China travel plays. UTA appears to be their vehicle to tap into the growing China travel sector. It is also worth noting again that PCLN is PAR's top holding which we know is already a UTA partner in China too via Agoda.
When you add PAR as a 5% long term holder with Valente's long term 10% stake, that locks up 3,031,000 shares of float in strong hands.
Bottom Line: We need more institutional support!
How can UTA have twice the institutional ownership as CCME with 22% vs. 11% respectively.
Not enough strong hands holding the float to keep this volatility down.
Does this price action mean divy was already priced in?
I would have expected it to hold gains after a positive announcement?? At this rate, it will be a flat day for CCME.
I'll give you #3, but:
1. Currently, UTA has twice the insitutional support of CCME (22% vs. 11% respectively); granted that would change dramatically for CCME if divi announced. And I believe UTA is on the verge of coverage initiation after 10-K is out. And price tagets should be at minimum a 10 forward PE of $1.51 EPS ($15.00).
2. If you followed UTA in spring-summer last year (April-August), you saw how parabolic UTA can run off retail mo-mo and this is possible because UTA float is smaller and it is covered in financial press in same sentence as CTRP (35 forward PE) and LONG (56 forward PE). When retail sees that value disparity, they want some UTA. I can see this happening again in the near future based on UTA chart.
Jing Xie has confirmed that he bought 39,850 shares at $6.20 because of "strong confidence" in the company. I haven't asked CCME CFO yet, but I would assume his response would be the same.
CCME's $1.5M CFO buy is overshadowing Xie's $250K buy of UTA based on today's CGS chatter and price/volume, but I believe UTA's news is more dramatic and bullish based on these comparative numbers to its peer:
UTA ($250K CFO buy at $6.20):
UTA, 2011 PE is 4 ($1.51 EPS)
CTRP, 2011 PE is 35 ($1.31 EPS)
Bottom line: UTA is priced 8.75 times less than CTRP on 2011 EPS
CCME ($1.5M CFO buy at $15):
CCME, 2011 PE 6 ($2.87 EPS)
FMCN, 2011 PE 16 ($1.35 EPS)
Bottom line: CCME is priced at 2.66 times less FMCN on 2011 EPS
UTA is much more undervalued relative to its China peer than CCME. Both companies have loads of cash (UTA, $56M; CCME, $169M) and no debt, but UTA is growing earnings YoY faster that CCME based on 2011 forecast of UTA by 20% in 2011 versus CCME at 8% in 2011.
I own both and love both stocks, but remain more overweight UTA based on this peer/value analysis and my belief that UTA will outperform CCME when investors realize these facts.
Also Brean Murray has stood by UTA and their 2010 EPS of $1.35 and 2011 EPS of $1.55
http://www.breanmurraycarret.com/pdf/ResearchUniverse.pdf
Page 5 is UTA
UTA running...filled 4.77 gap down and about to break out on high volume!
HFGB having another huge volume day, something is up? Maybe folks are just realizing that $.22 EPS for 2010 makes a $.56 stock real cheap!
UTA reiterated 2nd half 2010 guidance of $82-$92 million gross and $16.8-$17.8 million net income or $.78-$.88 in second half for full year 2010 EPS of $1.35 - $1.45!
She's running! UTA
UTA hitting it out of park on investor conference call doing a very professional job answering all questions with clarity and confidence! Should get a nice pop this morning
Anyone holding UTA into pre-market CC tomorrow? Big risk in them not handling it well (as they have been known to do in CCs), but the reward could be huge if they hit it out of the park with their response to Hempton short attack. With a week to prepare, you would think chances are for a good performance.
Still holding UTA Joe into CC?
or if he booked his travel with UTA!
UTA: Getty-up into Wednesday's conference call, gotta love the pressure this puts on shorts to cover, and Hempton appears to be out of bullets.
UTA would not surprise me if they announced buyback on Wednesday to coincide with their invester conference call. Best way to fight back shorts right now...IMO
UTA is the only name I would plow into today since it just majorly corrected and swooshed out everybody with Bronte short attack, and the only people buying now are those stubborn longs looking to cost average and the opportunistic traders looking for bullish action heading into 9/29 conference call. I like my chances especially with UTA's relative strength in today's tape.
To play these names now, look for stocks with a known positive catalyst coming if you are trading them. UTA is an example of a severly beaten down name with a known catalyst in 4 trading days, 9/29 conference call. With the questions being submitted in advance, UTA management will surely have their ducks in a row and be ready to boost investor confidence in company. I would expect shorts to be cautious going into this catalyst. Therefore, a buy here at the 61.8% retrace at $3.85 (which it is still holding) from its recent bottom at 3.25 is a good trading idea going into next week's catalyst. Any other nice setup ideas like this are appreciated if you know of them.
UTA gaining strength in anticipation of 9/29 conference call and due to Bronte's lastest bash having no impact on stock price today, should be a volatile ride going into 9/29, but one I think will lead to filling 4.77 gap down; $3.85 is 61.8% fib retract point.
The sting is gone and no longer are Hempton's bogus claims having an impact on stock price. A true sign that we are so low & cheap relative to 2010 guidance ($1.35 EPS) that buyers are back and starting the new base for UTA.
The October 5.00 put holders may want to exit those positions soon while they are still valuable as we should see a steady rise toward $5.00 in anticipation of 9/29 conference call.
You would expect UTA management to be thoroughly prepared for call with information to wow, assure, and solidify their investor base.
I'm talking about UTA, huge put volume today Oct. 5.00 at $1.30
What about 5.00 put volume today? Last time we had put spike, Bronte hit UTA.
Joe, still bullish on UTA? Why so many Oct. 5.00 puts today?
Now over 1,600 in volume for 5.00 puts at $1.25 ask now.
Looks like a good buy point coming around 3.60.
Hempton's hit piece shows his complete ignorance for UTA business model and business infrastructure. Hempton's piece is very weak because of his incorrect assumptions regarding how they conduct business.
1. UTA is not an exlusive online booking portal like CTRP, ELONG (or Expedia, Orbitz, etc.); UTA is an old fashioned face to face (or phone) leisure travel tour planner. Therefore, their website is not built like CTRP's and instead their focus is on their call center and network of regional sales offices.
2. UTA derives its income from the small, regional package tour businesses it acquires. These businesses are bricks and mortar shops where people come to book their travel plans. When UTA acquires these companies, they do not change their name to Universal Travel, the keep their names and benefit by UTA's purchasing power in negotiating with airlines, hotels, trains, and car vendors.
3. UTA's customers are tier-two city leisure travelers, not tech-savy business travelers like CTRP caters to. These UTA customers go directly to local agent to book travel or use UTA's call in centers. They don't book online and most don't even have computers.
4. UTA caters primarily to domestic, Chinese, tier-two city travelers. Their online platform has no need to cater to international customers looking to book travel.
5. Packaged tours is UTA's specialty and unique selling proposition. Listen to CTRP and LONG's conference calls and you'll see how packaged tours is the hotest growth are of this sector. You don't book a packaged tour online, you do it on the phone or face to face at a sales office. UTA's infrastructure is built for that.
Over 2000 volume on 5.00 October puts for $.50 yesterday in UTA.