F9 IPOs at $6.3B EV, same as NK?
 

Frontier's valuation in the IPO was about $4BB which translates to an enterprise value of $6.3BB. Spirit is at $3.5 Mkt Cap, with an enterprise value of about $6.5BB

Seems a little rich to have Frontier have the same value as Spirit. I would think Spirit is 1.5X as big, is better run (yes I am biased) and should have a larger value commensurate with all that.

Thoughts?

buy Frontier stock then?

I think that relative mismatch would imply Short F9, Long NK - but us puny retail guys cannot short new IPOs, and I am not gonna put more eggs in the NK basket since I already into them for over 7 digits (future earnings)

SO - I am gonna do nothing.
Other could be inclined to buy SAVE instead of ULCC.
If F9 valuation holds, NK could take a nice 50% jump from 37 to 57! YAY....
If NK valuation holds, F9 could drop 1/3 from 19 to 12 - I hope not

I think the LCC & ULCC will do better over the next few years. and both will do better - Just NK has more headroom...

F9 IPOs at $6.3B EV, same as NK?
 

I think it’s both. Spirit has always been an undervalued stock/company for whatever reason. Allegiant and now Frontier seem to be a little overvalued. Never really understood why if we are larger than either of those companies, beat them or come very close in basically every metric and yet they’re still valued over us. Maybe it’s a debt issue...

Seriously, you think there is an underlying reality to the market? Oh, there probably is, but it’s lost in the day to day variability of public opinion. On May 15 2020 SAVE closed at $8.01 per share. Since then there have been no major management changes, I doubt that NK has hired or fired or retired 200 people, and yet Friday it closed at $37.36.

It’s all opinion based - that’s why they call it a market - and opinion is driven as much by emotion as fact - probably more so. Oh, in the long run I think the underlying fundamentals govern it, but on any given day? Nope. Frontier as an IPO is new and shiny - not unlike shiny jet syndrome - and there is no good reason not to buy it. But it’s the flavor of the month. That’s not putting it down, it is GOOD for an IPO to get a healthy start, but fundamentally I think NK and F9 are six of one, half dozen of another. They use the same business model and in the current climate I think both will gain ground on the Big Three in domestic flying unless business flying rebounds quickly.. SWA will too, and from a higher baseline.

I believe that Frontier stock is a bit over valued

If you watched the Sun Country IPO, the stock popped 50% on day 1, while Frontier traded flat and actually lost a tiny bit. Huge difference, and I think it's mainly the price the ipo was set at.

I hold a large amount of SAVE most of which I bought around $10 to 15. If Frontier drops to the mid to low teens I'll buy, but otherwise I won't touch it.

And I'm holding my SAVE stock long term btw

Awesome! Good luck with the SAVE holdings.... Should continue to do well for you.

Probably not the best idea to put a lot of your retirement investments in the company you work for or even the industry you work in. It sort of sets you up for a single point failure. If it’s money you are just going to GAMBLE with that’s fine. If it’s money you are someday going to NEED a broader diversification is probably preferable. Just sayin...

Who said it was his retirement money?

Just making a comment - and gave both contingencies. But I’ve seen it happen, guys planning on retirement through ESOP purchases and their 401k in more company stock. That’s a plan that works until it doesn’t. But if he’s playing the market for $hits and grins, more power to him.

Speaking of retirement, does anyone have a link to a 401k calculator that takes company direct contribution into account.? I can only find a 401k calculator that uses company matching which will give significantly different results

There isn’t one on the homepage after you log into our 401k?

LUV stock suffered the same fate compared to the big 3 for the last several years but has consistently remained the most stable stock among them. And now their valuation has steadily increased and even surpassed DAL after the pandemic began — largely owed to their prudent business management over the last several decades. Slow and steady wins the race as they say. SAVE will be fine, it’s definitely a stock that will take off over time. ULCC might be more prone to shorting until they establish a more stable growth strategy and reputation (like SAVE has).

ESOP? Hahahaha. You must have this confused with another company

I bought my SAVE shares with "play money" and not my 401k contributions. I was interested in buying some well before I'd ever heard of Covid. I actually bought a few shares at the high 30s. Then a couple months later it was down to single digits so I bought a lot more.

My retirement account is 100% low cost index funds

someone above posted about a 401k calculator that takes into account a company DC fund. I have not found one but you can kind of trick it into what you want but saying you get a 15% dollar for dollar match. But that assumes that you put something along those lines into your 401k on your own

Btw, the fact that you can't find a 401k calculator that works for you shows how much better airline pilot retirement benefits are compared to normal folks

Yes, so true, the retirement benefits are fantastic. Many of us are lucky enough to reach the individual limit before the end of the year. That's where you run into the problem with the typical calculator. As you likely know, the calculator misses the portion the company still contributes after I have reached my max. I use the Schwab app to manage my 401k but haven't seen a calculator on there. Maybe I'm just missing it.

It's possible to build a spreadsheet in Excel to do all the future value calculations you're looking for. It takes a bit of poking around to find the appropriate functions, but it may occupy your time on an overnight if you're so inclined.

The other thing a I've found pretty valuable is an app for my iPhone that simulates an HP 19B business calculator. This is the calculator I used in undergrad as a business major in the late 80's. I think the app is somewhere around $5 and does all kinds of future value calculations. It's a bit bittersweet for me to own the app for $5 because the actual calculator cost $200+ in 1989 dollars.

The app is sold by RLM tools dot com. If you search for "HP 19B calculator" on the App Store, you'll find it listed as RLM-19BX.

This is the one I use and the only one I can find that removes matching. The only thing it doesn’t let you input 0% for your personal contribution.

https://www.coralfcu.org/index.php/s...ent-calculator

Except being on first year pay, is there an advantage I’m missing to why you would contribute 0%?

F9 IPOs at $6.3B EV, same as NK?
 

You could be trying to diversify into other investment vehicles. Real estate, Roth IRA, even a brokerage account... There are plenty of reasons why people would rather invest their money outside of a 401k, especially when the company is already putting in more than what most people do without the match.

401k has a Roth option, but otherwise I agree. That said I still max out the 401k bc I’m too stupid to do better outside with that money by contributing zero. Buy high sell low is my motto!

The stock market is a little bit like Las Vegas. A lot of the money people make in it is money that other people lost in it...

real estate is full proof. In 2008 git furloughed and holding the bag on a house worth half as much as I paid. I keep all my savings buried literally in holes around the country. I have a safe in a secret location with the map to the holes. The combination to the safe is with a trusted friend and only he knows the combination. He will only give out the combination with a password. Only he knows the password. His dog is the only other soul that knows it. I don’t even know it

Bet that house would be worth a lot more right now.

The stock market is better than Vegas or holes in the ground.

The S&P500 has gone up 10% on average for the last forever. And you don't need to repaint, change the carpets, or worry about the lawn. Buy and hold. Don't try to time it. But shares of low cost index funds, don't sell and keep buying. It works. As long as you don't panic sell and then wait 2 years to get back in.

F9 IPOs at $6.3B EV, same as NK?
 

You don’t need your own money to invest in real estate. Last time I checked you can’t take out a loan and have someone else pay it if you want to invest in the stock market.


Sent from my iPhone using Tapatalk

same with the stock market. You can buy on credit.

Sure you can, it’s called buying on the margin - if you are stupid enough to play that game. But the low overhead tax efficient index fund is a slow but sure winner. Real Estate? Got a shyster neighbor that simply doesn’t pay his mortgage. Or taxes. He hasn’t paid a dime since the foreclosure ban went into effect. So how have your rentals done the past year?

F9 IPOs at $6.3B EV, same as NK?
 

My two rentals have done great the last year. Luckily they’re in decent neighborhoods and the rent is high enough to not attract that type of tenant. But even if they did stop paying and I had to cover the mortgage it’s still an investment that is appreciating. If a home goes up a set percentage it’s the same as an index fund going up a certain percentage. Just haven’t found a way to take a $300k loan out and invest it into an index fund, but let me know what brokerage is giving you that kind of leverage and maybe I’ll change my mind.

But I’m not by any means saying it’s the best investment or only investment. Just saying that not everyone who doesn’t max out their 401k is doing something wrong.

You left a big part out, which is tax on capital gains. It's easier to avoid capital gains tax on real estate than investing in Index on Mutual funds on the side. My wife is driving around in our "company" car that we are deducting the depreciation of the car and real estate investment, which offset part of my W2. There's more to real estate investing, than owning a rental property. I sold a commercial property a few years back and provided seller financing to the buyer, while collecting the loan payment and 5% interest rate. That's just a fix rate of return on interest, and doesn't even factor in the valve that it went up before I sold it.

Can you replicate that same result multiple times over 4 decades??

Why can't you? my last sale, is a 10 year loan on a 15 year amortization schedule. Most commercial loans are 5-20 years term. The down payment from the buyer paid off my loan (at the time), which means I own it out right. This is where these kinds of deals is different from a traditional rental property. If the buyer default, I'll eventually foreclose, and put it back up for sale. It actually works in my advantage. Don't get me wrong, I do have investment in Index / Mutual funds, along with my kid's 529, but I get the best ROR in real estate once factor in the tax advantage.

I am glad you are doing well. Will it beat the market with reinvested dividends is my curiosity.....

My post wasn't just about rate of return. Once you factor in the tax advantage, my investment in real estate has a bigger advantage. Investing in Index / Mutual fund doesn't help reduce my personal taxable income. By having my wife qualify as a real estate professional, and carrying over the those deduction from the LLC to offset the W2 makes a big difference.

Real estate is undoubtedly one of the greatest investments in history.

But I don't have to hassle tenants about late rent. I don't have to worry about them ****ing off the neighbors. I don't have to worry about a 2am call about a water leak.

My stocks don't cause me any of those headaches. And I don't like headaches. You just have to pay attention. And when you pay attention you can buy a stock like Spirit at $8.

Or you can hire a property management company.

This is true. It’s not for everyone. Look into real estate investment trusts if you don’t care to deal with the actual asset and have no use for future or family use.

.......,,,,,

I'm an FO with 3 young kids living in an expensive SoCal area so cash flow is my problem. I'm at 0% until I can pay for my kid's swim team and hockey dues without dipping into savings. Works out to about 5th year pay in my budget. YMMV, I did the math and made my choices eyes wide open. No regrets, but company DC makes up 99% of my retirement savings for now.

Ual ceo said domestic traffic was over 100% recovered, so I expect blow out earnings and guidance by spirit after the close!
Go Spirit!