Category: Crude Oil

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Rig Counts declined last week!

Baker Hughes reports U.S. rig count down 9 to 711 rigs.

Baker Hughes (BKR) reports that the U.S. rig count is down 9 from last week to 711 with oil rigs down 5 to 570, gas rigs down 4 to 137 and miscellaneous rigs unchanged at 4.

The U.S. Rig Count is down 16 rigs from last year’s count of 727 with oil rigs down 4, gas rigs down 14 and miscellaneous up 2.

The international offshore rig count for April 2018 was 194. Stockwinners

The U.S. Offshore Rig Count is down 1 to 20, up 4 year-over-year.

The Canada Rig Count is up 2 from last week to 87, with oil rigs up 3 to 42, gas rigs down 1 to 45.

The Canada Rig Count is down 16 rigs from last year’s count of 103 with oil down 13, gas rigs down 3.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

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West Texas Intermediate (WTI) is up $1.08 to $72.86 per barrel (52 weeks high of $122.10). Brent crude is up $1.07 to $77.12 per barre (52 weeks high of $123.58). Gasoline last traded at $2.702 per gallon (52 weeks high of $4.31 per gallon).

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts Declined last week!

Baker Hughes reports U.S. rig count down 12 to 759 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 12 from last week to 759 with oil rigs down 10 to 599, gas rigs down 2 to 158 and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is up 146 rigs from last year’s count of 613 with oil rigs up 102, gas rigs up 42 and miscellaneous up 2.

The U.S. Offshore Rig Count is down 1 to 12, down 4 year-over-year. The Canada Rig Count is up 2 from last week to 249, with oil rigs up 2 to 159, gas rigs unchanged at 90.

The Canada Rig Count is up 31 rigs from last year’s count of 218 with oil rigs up 23, gas rigs up 8.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

https://stockwinners.com

West Texas Intermediate (WTI) is down $2.05 to $73.81 per barrel (down from a high of $123.70). Brent crude is down $2.06 to $80.19 per barre (down from a high of $127.98). Gasoline last traded at $2.349 per gallon (down from a high of $4.31 per gallon).

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Stockwinners Portfolio returns 22.8% in 2022

S&P 500 declined 19.6% during the same period

The bear market of 2022 cost most investors dearly whereas Stockwinners readers were able to register double digit returns. Our experience in the past 24 years has taught us how to avoid pitfall of following crowds and Wall Street gurus. In fact, we stayed away from story stocks such Tesla (TSLA), Paypal Holdings (PYPL) and Meta Platform (META). We concentrated on small to medium cap stocks. These stocks typically do not have any exposure to overseas markets and are traded on their own fundamentals.

Russian invasion of Ukraine created unique trading opportunities for investors. The vicious invasion of Ukraine caused energy and commodity prices skyrocket thus offering opportunities in that space. In fact, one of our better performers on the year was EPAM System (EPAM). This software company has about 25 percent of its workforce located in the eastern European country. Those who bought the stock based on our recommendations were rewarded with a 23% return in two days.

Energy stocks were awakened with the invasion. Crude oil shot up to $106.50 from $70 per barrel. This price increase buoyed energy stocks. Amongst our better performers were shares of Par Pacific Holdings (PARR). The refiner shares gained fifteen percent following our recommendations.

Other commodity stocks that were featured in our portfolio included those involved in precious and rare minerals mining. Livent Corporation (LTHM) was one such name. The lithium miner was featured several times with solid returns. The returns were 14%, 12% and 18%. Sigma Lithium Corporation (SGML) was another name in the sector. It gained 14% following our recommendations.

Sierra Wireless, Inc. (SWIR) was another stock that came to our attention. The company provides device-to-cloud Internet of Things (IoT) solutions. Shares were featured in August with success. Stock gained 18 percents in two weeks.

We featured put options (shorting the stock) on several names. One of the names featured was Open Text Corporation (OTEX). Put option on the name returned 325% in 17 days. The put was featured at $1.50 and it was closed 17 days later at $6.40. Another name that was featured several times was Carvana (CVNA). Shares of the used car retailer have fallen from $300 to $3.55.

A strong employment market created opportunity in placement companies. Cross Country Healthcare, Inc. (CCRN) was such name. The company places medical staff. Shares were featured in August and gained 18% in less than two weeks.

Our portfolio can be downloaded here. Additionally, one may download our selections for the past 18 years in a spreadsheet format.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts declined last week!

Baker Hughes reports U.S. rig count down 3 to 768 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 3 from last week to 768 with oil rigs down 2 to 610, gas rigs down 1 to 156 and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is up 224 rigs from last year’s count of 544 with oil rigs up 166, gas rigs up 56 and miscellaneous up 2.

The international offshore rig count for April 2018 was 194. Stockwinners

The U.S. Offshore Rig Count is down 1 to 14, up 1 year-over-year.

The Canada Rig Count is up 2 from last week to 212, with oil rigs up 1 to 145, gas rigs up 1 to 67.

The Canada Rig Count is up 46 rigs from last year’s count of 166, with oil rigs up 47, gas rigs down 1.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

https://stockwinners.com

West Texas Intermediate (WTI) is down $1.18 to $87.84 per barrel (down from a high of $123.70). Brent crude is down $1.27 to $93.77 per barre (down from a high of $127.98). Gasoline last traded at $2.564 per gallon (down from a high of $4.31 per gallon).

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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ECB plays catch up, raises refinancing rate to 2 percent

ECB raises Main Refinancing Rate by 75bps to 2.00%

The ECB stated:

“The Governing Council today decided to raise the three key ECB interest rates by 75 basis points. With this third major policy rate increase in a row, the Governing Council has made substantial progress in withdrawing monetary policy accommodation.

The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target.

Christine Lagarde: ECB President

The Governing Council will base the future policy rate path on the evolving outlook for inflation and the economy, following its meeting-by-meeting approach. Inflation remains far too high and will stay above the target for an extended period. In September, euro area inflation reached 9.9%.

In recent months, soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand have led to a broadening of price pressures and an increase in inflation.

The Governing Council’s monetary policy is aimed at reducing support for demand and guarding against the risk of a persistent upward shift in inflation expectations. The Governing Council also decided to change the terms and conditions of the third series of targeted longer-term refinancing operations (TLTRO III).

During the acute phase of the pandemic, this instrument played a key role in countering downside risks to price stability.

Today, in view of the unexpected and extraordinary rise in inflation, it needs to be recalibrated to ensure that it is consistent with the broader monetary policy normalisation process and to reinforce the transmission of policy rate increases to bank lending conditions.

Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 2.00%, 2.25% and 1.50% respectively, with effect from 2 November 2022.

Asset purchase programme (APP)

The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it started raising the key ECB interest rates and, in any case, for as long as necessary to maintain ample liquidity conditions and an appropriate monetary policy stance.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts Rise as Oil Stablizes!

Baker Hughes reports U.S. rig count up 4 to 763 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 4 from last week to 763.

U.S. Rig Count is up 251 rigs from last year’s count of 511 with oil rigs up 239, gas rigs up 58 and miscellaneous rigs up 4.

The U.S. Offshore Rig Count is unchanged at 16, up one year-over-year.

The Canada Rig Count is up 6 from last week to 211, with oil rigs up 3 to 140, gas rigs down 4 to 63.

The Canada Rig Count is up 47 rigs from last year’s count of 156, with oil rigs up 45, gas rigs up 3 and miscellaneous rigs down 1.

The International Rig Count is up 27 rigs to 860 and up 81 from last year’s count.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

https://stockwinners.com
Rig Counts Rise – See Stockwinners.com Market Radar to read more

West Texas Intermediate (WTI) is up 28 cents to $85.34 per barrel (down from a high of $123.70). Brent crude is up $0.72 to $91.54 per barre (down from a high of $127.98). Gasoline last traded at $2.418 per gallon (down from a high of $4.31 per gallon).

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts decline as oil retreats!

Baker Hughes reports U.S. rig count down 3 to 764 rigs

Baker Hughes (BKR) reports that the U.S. rig count is down 3 from last week to 764 with oil rigs down 7 to 598, gas rigs up 4 to 161 and miscellaneous rigs unchanged at 5.

U.S. Rig Count is up 273 rigs from last year’s count of 491 with oil rigs up 211, gas rigs up 58 and miscellaneous rigs up 4.

The U.S. Offshore Rig Count is down 1 to 16, up 2 year-over-year.

The Canada Rig Count is down 1 from last week to 203, with oil rigs up 3 to 140, gas rigs down 4 to 63.

The Canada Rig Count is up 47 rigs from last year’s count of 156, with oil rigs up 45, gas rigs up 3 and miscellaneous rigs down 1.

Rig Counts Rise to a 2-year high

The Canada Rig Count is up 28 rigs from last year’s count of 126, with oil rigs up 22, gas rigs up 6.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

https://stockwinners.com
Rig Counts Rise – See Stockwinners.com Market Radar to read more

West Texas Intermediate (WTI) is up 72 cents to $89.24 per barrel (down from a high of $123.70). Brent crude is up $0.90 to $95.04 per barre (down from a high of $127.98). Gasoline last traded at $2.869 per gallon (down from a high of $4.31 per gallon).

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts Rise to a 2-year High !

Baker Hughes reports U.S. rig count up 13 to 753 rigs

Baker Hughes reports that the U.S. rig count is up 13 from last week to 753 with oil rigs up 10 to 594, gas rigs up 3 to 157 and miscellaneous rigs unchanged at 2.

The U.S. Rig Count is up 283 rigs from last year’s count of 470 with oil rigs up 222, gas rigs up 59 and miscellaneous rigs up 2.

The U.S. Offshore Rig Count is flat at 16, up 2 year-over-year.

The Canada Rig Count is down 2 from last week to 154, with oil rigs flat at 104, gas rigs down 2 to 50.

Rig Counts Rise to a 2-year high

The Canada Rig Count is up 28 rigs from last year’s count of 126, with oil rigs up 22, gas rigs up 6.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up $2.20 to $106.47 per barrel. Brent crude is up $2.02 to $112.17 per barrel. Gasoline last traded at $3.82 per gallon up 5 cents on the day.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Oil Prices Soar on EIA report!

OPEC, Russia-led group agree to increase oil production

WTI prices extended earlier gains following the bullish EIA inventory report that overshadowed the boost in production announced by OPEC+.

The Energy Information Administration (EIA) is the statistical agency of the Department of Energy. It provides policy-independent data, forecasts, and analyses to promote sound policy making, efficient markets, and public understanding regarding energy, and its interaction with the economy and the environment.

Crude prices have climbed a whopping 6-handles on the day, surging to $117.27 from an overnight low of $111.20. This is the highest since March.

The market has been whipped recently, with prices climbing on news EU would sanction some Russian oil imports, only to tumble on reports OPEC+ was considering excluding Russia from production quotas which suggested increased output from Saudi and UAE to make up for the loss.

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

Then overnight there was talk that the cartel would boost production between 500 M and 700 M barrels, which saw prices dip to the lows, but only briefly.

Prices rallied and remained elevated into the $114 area, even after OPCE+ confirmed the production increase by some 50% or 648k bpd in July and August, as there were doubt the increased output can be effected.

There is also skepticism supply will be able to meet demand down the road. The market also was likely pricing in an inventory shortfall, which the EIA confirmed with crude stocks falling 5.1 M barrels, while distillates and gas stocks declining too.

WTI is up $1.43 to $116.67 per barrel. Brent is up $1.22 to $117.52 per barrel. Gasoline is up 0.126 to $4.199 per gallon. Note that dollar is weaker today which is also helping oil prices. Euro last traded at $1.08 after hitting a low of $1.06 on the day.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Drill, Baby, Drill,

Baker Hughes reports U.S. rig count up 3 to 698 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 3 from last week to 698 with oil rigs up 3 to 552, gas rigs unchanged at 144 and miscellaneous rigs unchanged at 2.

The international offshore rig count for April 2018 was 194. Stockwinners

The U.S. Rig Count is up 258 rigs from last year’s count of 440 with oil rigs up 210, gas rigs up 48 and miscellaneous rigs unchanged at 2.

The U.S. Offshore Rig Count is up 1 to 14, up 1 year-over-year.

The Canada Rig Count is down 6 from last week to 95, with oil rigs down 3 to 45, gas rigs down 3 to 50.

The Canada Rig Count is up 44 rigs from last year’s count of 51, with oil rigs up 25, gas rigs up 19.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up $1.10 to $106.39 per barrel. Brent crude is up $1.42 to $108.72 per barrel. Gasoline last traded at $3.474 per gallon flat on the day.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Investor demands replacing IAA CEO

Ancora urges IAA to replace CEO or run sale process

IAA, Inc. (IAA) operates a digital marketplace that connects vehicle buyers and sellers. The company’s platform facilitates the marketing and sale of total loss, damaged, and low-value vehicles for a range of sellers. It provides buyers with various bidding/buying digital channels, vehicle merchandising, evaluation services and online bidding tools, and replacement part inventory. 

IAA operates a car auction platform

Ancora Holdings Group, which beneficially owns approximately 2% of IAA’s outstanding common stock, sent a letter to the company’s board which stated in part,

“Given IAA’s underperformance and the fact that the Company’s market capitalization has plummeted by roughly 40% since reporting third quarter earnings in November 2021, the status quo cannot persist. We believe there are two strategic actions for the Board of Directors to consider at this point:

1. Replace Mr. Kett with a new CEO who is more dynamic and equipped to reinvigorate the organization. In our view, IAA needs a leader with a vision for achieving organic market share growth, improved margins and effective capital allocation.

2. If the Board is unwilling to act with urgency to improve leadership, it should run a formal sale process to sell the Company. ”

IAA salvage auction lot

The activist added, “In light of IAA’s attractive attributes and business model, we anticipate the Company would obtain a significant premium relative to its current share price if taken private by one of the many well-capitalized potential acquirers in the marketplace.

Ancora owns 5% of shares or $250M

We estimate a takeout price of $55 or more is achievable based on a trailing 12-month EBITDA of 15.5x and an analysis of peers’ valuations and precedent transactions.

2 At this point, a sale seems like the best risk-adjusted path forward for stockholders.”

IAA is up $2.51 to $38.83.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts Unchanged as Crude Soars

Baker Hughes reports U.S. rig count unchanged at 650 rigs

Baker Hughes (BKR) reports the U.S. rig count is unchanged from last week at 650, with oil rigs down 3 to 519, gas up 3 to 130, and miscellaneous rigs unchanged at 1.

The U.S. rig count is up 247 rigs from last year’s count of 403 with oil rigs up 209 gas rigs up 38 and miscellaneous unchanged at 1.

The international offshore rig count for April 2018 was 194. Stockwinners

The U.S. offshore rig count is unchanged at 12, down 2 year-over-year.

Canada Oil Rig Count is at a current level of 134, down from 138 last week and up from 92 one year ago. This is a change of -2.90% from last week and 45.65% from one year ago.

Goldman Sachs

Meanwhile, Goldman Sachs raised it’s target price on the West Texas Intermediate (WTI) to $150 per barrel by this Summer as pressure builds up to sanction Russian crude oil imports.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is up $7.71 to $115.39 per barrel. Brent crude is up $7.36 to $117.92 per barrel. Gasoline last traded at $3.524 per gallon up 24.1 cents on the day. Get ready to pay substantially more at the pump.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts Rise as Oil Tops Out!

Baker Hughes reports U.S. rig count up 5 to 650 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 5 from last week to 650 with oil rigs up 2 to 522, gas up 3 to 127, and miscellaneous rigs unchanged at 1.

U.S. Rig Count is up 248 rigs from last year’s count of 402 with oil rigs up 213 gas rigs up 35 and miscellaneous unchanged at 1.

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

The U.S. Offshore Rig Count is unchanged at 12, down 5 year-over-year.

The Canada Rig Count is up 4 from last week to 224, with oil rigs up 3 to 138, gas rigs unchanged at 85 and miscellaneous up 1 to 1.

The Canada Rig Count is up 61 rigs from last year’s count of 163, with oil rigs up 46, gas rigs up 14 and miscellaneous up 1.

Oil Tops Out

WTI Crude oil rallied to above $105 per barrel on news of invasion of Ukraine. In a classical top out price behavior, shares hit a multi-year higher then reversed intraday and closed lower. Today, the decline is continuing as price gap between Brent and WTI is closing. Furthermore FOMC is going to raise interest rates which means a stronger dollar, and lower commodity prices as they are denominated in dollar. OPEC+ is meeting next week to consider production quotas.

WTI Crude Oil 5-day Price Chart

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

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The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is down $1.45 to $91.35 per barrel. Brent crude is down $1.54 to $93.85 per barrel. Gasoline last traded at $2.870 per gallon down 5 cents on the day.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Rig Counts Surge!

Baker Hughes reports U.S. rig count up 10 to 645 rigs

Baker Hughes (BKR) reports that the U.S. rig count is up 10 from last week to 645 with oil rigs up 4 to 520, gas up 6 to 124, and miscellaneous rigs unchanged at 1.

Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count

The U.S. Rig Count is up 248 rigs from last year’s count of 397 with oil rigs up 215 gas rigs up 33 and miscellaneous unchanged at 1.

The U.S. Offshore Rig Count is down 4 to 12, down 4 year-over-year.

The international offshore rig count for April 2018 was 194. Stockwinners

The Canada Rig Count is up 1 from last week to 220, with oil rigs down 2 to 135, gas rigs up 3 to 85.

The Canada Rig Count is up 48 rigs from last year’s count of 172, with oil rigs up 35, gas rigs up 13.

The Baker Hughes rig counts are counts of the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets.

The Company has issued the rig counts as a service to the petroleum industry since 1944, when Hughes Tool Company began weekly counts of the U.S. and Canadian drilling activity. The monthly international rig count was initiated in 1975.

West Texas Intermediate (WTI) is down 43 cents to $91.35 per barrel. Brent crude is up 31 cents to $93.25 per barrel. Gasoline last traded at $2.659 per gallon up a penny on the day. Get ready to pay more at the pump.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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Frontier buys Spirit Airlines

Frontier, Spirit to combine in deal that implies $25.83 per Spirit share

Spirit Airlines (SAVE) and Frontier Group Holdings (ULCC) announced a definitive merger agreement under which the companies will combine, creating America’s most competitive ultra-low fare airline.

Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, Spirit equity holders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own.

This implies a value of $25.83 per Spirit share at Frontier’s closing stock price of $12.39 on February 4, 2022, representing a premium of 19% over the February 4, 2022, closing price of Spirit, and a 26% premium based on the 30 trading-day volume-weighted average prices of Frontier and Spirit.

The transaction values Spirit at a fully diluted equity value of $2.9B, and a transaction value of $6.6B when accounting for the assumption of net debt and operating lease liabilities.

Upon closing of the transaction, existing Frontier equity holders will own approximately 51.5% and existing Spirit equity holders will own approximately 48.5% of the combined airline, on a fully diluted basis, providing both Frontier and Spirit equity holders with substantial upside potential.

Spirit Route Map

The Board of Directors for the new airline will be comprised of 12 directors (including the CEO), seven of whom will be named by Frontier and five of whom will be named by Spirit.

Bill Franke, CEO of the Indigo Partners, will be Chairman of the Board of the combined company.

Frontier Route Map

The merger is expected to close in the second half of 2022, subject to satisfaction of customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders.

Frontier’s controlling stockholder has approved the transaction and related issuance of shares of Frontier common stock upon signing of the merger agreement.

The combined company’s management team, branding and headquarters will be determined by a committee led by Franke prior to close.

Separately, Spirit reported Q4 revenue $987.56M, consensus $963.15M.

“Our fourth quarter 2021 results came in better-than-expected, despite the negative impact from Omicron-related flight disruptions, primarily due to very strong demand over the peak December holiday period. I want to thank the entire Spirit team for their professionalism and commitment to providing excellent service to our Guests,” said Ted Christie, Spirit’s president and CEO.

Ted Christie, Spirit’s president and CEO

Spirit Airlines is up 15.9%, or $3.46 to $25.20. Frontier Group is up 14 cents to $12.81.

STOCKWINNERS

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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