Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.
David Fried, editor of the Buyback Letter, chose Big Lots Inc. (NYSE: BIG) as his favorite stock for 2007, which rose 39% as of 6/1/07. Please see his original recommendation and his current opinion on Big Lots.
Fried's new pick is SkyWest, Inc. (NASDAQ: SKYW). He explains, "SkyWest, the nation's largest independently owned regional airline, is a contract carrier for United Airlines, Delta Air Lines and, most recently, Midwest Airlines.
"Nimbler than the big legacy carriers and not burdened by their bloated labor costs, SkyWest has a steady earnings stream, good cash flow, and an attractive P/E of 11. Its reputation as an efficient, low-cost operator and as the best-managed regional airline in the business was enhanced with the 2005 acquisition of Atlantic Southeast Airlines, which made SkyWest a player on the national stage.
"Since the mid-1970s, SkyWest has grown from a company with annual revenue of under $1 million to a publicly held company with annual revenues of more than $1 billion and almost 15,000 employees. SkyWest is set for continued long-term growth.
"SkyWest has done a lot of things right with its personnel. SkyWest has always put a priority on employee relations, which has helped send profits to the bottom line via many cost-cutting and efficiency-producing ideas that originated from the staff.
"SkyWest's pilots are not unionized and never have been, which helps to keep labor costs under control and historically accounts for the airline's excellent on-time performance record (SkyWest was named the number one on-time airline in the U.S. by the Department of Transportation for 2003, 2004, and 2005).
"It's been a favorite of mine for the past decade. With a solid history of repurchasing its shares (which boosts earnings per share and signals management's belief that the stock is undervalued), in March SkyWest's board authorized a buyback of 5 million shares,7.8% of all shares outstanding."
See all 20 stocks the advisors picked for the second half of 2007.
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