Hot Penny Stocks – Air Transport Services Group Inc. (ATSG)

Reliable customers are an essential part of the air delivery and freight equation. A shaky partner who contributes to a significant portion of your revenue could potentially spell disaster. This was the situation today’s company was facing after one of their primary clients eliminated its U.S. air cargo network in 2011.

Instead of wallowing in self-pity they took proactive action, and over the next year dramatically cut costs. Despite the loss of a significant revenue contributor, Air Transport Services Group (ATSG) managed to increase net earnings by approximately 76% in 2012.

 

QUICK FACTS

Ticker                                    ATSG

Industry                                 Air Delivery & Freight Services

Recent Price                         $6.00

Market Cap                           $384.8 m

Shares Outstanding              64.1 m

Average Volume                   58,606

Dividend Yield                       N/A

Website                                 http://www.atsginc.com

 

COMPANY DESCRIPTION

Air Transport Server Groups Inc. is a domestic and international air cargo transportation company. They meet the needs of customers worldwide through a number of diversified subsidiaries specializing in freight transport, air craft maintenance, engineering, flight dispatching, aircraft leasing and other related air cargo support services.

This has given ATSG flexibility to provide comprehensive air cargo solutions scalable to the needs of a diverse portfolio of small, midsized and large clients.

 

FINANCIALS

ATSG released their annual numbers for 2012 on March 4, 2013.

The company reported revenue of $607.4 million for the year. Down from last year’s revenue of $730.1 million. This is a decrease of 16.8%. Air Transport Service Group also reported net earnings of approximately $40.8 million… a 75.9% year-over-year increase from net earnings of $23.2 million in 2011.

As of December 31, 2012, the company reported $15.4 million in cash and $343.2 million of long-term debt.

 

KEY METRICS ANALYSIS

Trailing P/E                                       9.4 x

Price / Sales                                     0.6 x

Return on Assets                              4.9 %

Insider ownership                              2 %

Short Ratio                                        7.7 x

Current Ratio                                    1 x

Total Debt to Equity                          122.9 x

 

RECENT EVENTS

On March 11, 2013, ATSG announced the merger of two airline subsidiaries, Air Transport International (ATI) and Capital Cargo International Airlines (CCIA). The two subsidiaries have been combined under ATI, with a fleet of 13 cargo aircraft. This is just another step in reducing expenses in an effort to make ATSG a more profitable company.

“This merger is the most significant of a number of steps we are taking throughout ATSG to better fit our airline overhead and operating cost structures to the airline operations we have today, and expect to add in the future,” said ATSG President and CEO Joseph Hete.

 

MANAGEMENT TEAM

Joseph C. Hete – President, CEO, Director, CEO of ABX Air, Inc.

Quint O. Turner – CFO of the Company and ABX Air, Inc.

Richard Francis Corrado – Chief Commercial Officer, President of Cargo Aircraft Management, Inc.

W. Joseph Payne – Senior Vice President, Corporate General Counsel, Secretary

James H. Carey – Independent Chairman of the Board

 

STOCK ANALYSIS

ATSG

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

*ATSG’s 52-week low was $3.38 and the 52-week high was $6.09. Right now the stock is trading at $6.00. The 50-day moving average is near $5.07 a share and the 200-day moving average is at $4.33. The company has a market cap of $384.8 million and 64.1 million shares outstanding.

Stock prices as of 3/29/13