Watch for Higher Highs from Small-Cap Airline Stock SkyWest

SKYW stock has been dominant in October and the fourth quarter as a whole

by Josh Selway

Published on Sep 29, 2017 at 12:16 PM

Yesterday we took a close look at the top small-cap stocks to own in October, and on that list was airline concern SkyWest, Inc. (NASDAQ:SKYW). This is part of a larger phenomenon, too, since two large-cap airline stocks are among the best S&P 500 Index (SPX) stocks to own during the month. Let's take a closer look at SKYW shares as they approach a very bullish time of year. 

Flat out, the equity has been excellent on the charts over the past few years, enjoying a strong uptrend since the fourth quarter of 2014. Narrowing our focus, the security actually just broke out of a months-long consolidation period, breaking north of its 200-day moving average and touching a record high of $44.90 on Wednesday. The stock was trading just shy of this level at last check, up 0.6% for the day at $44.10, bringing its year-over-year lead to north of 65%. 

It looks like there's a strong possibility of SKYW extending this momentum in the near term, too. That's because the shares have closed October higher eight of the past 10 years, averaging a gain of 10%. As a result, the airline name also shows up on our list of best fourth-quarter small-cap performers, averaging a 12.4% gain for the period in the last decade. 

If it does continue to outperform, SkyWest could be due for bullish attention from analysts. At the moment, the stock has an average 12-month price target of $45.33, roughly in line with its current price point. It wouldn't be surprising to see price-target hikes come through on the shares going forward. 

And with SKYW trading near record highs, short sellers are likely getting nervous. In the last reporting period alone, short interest jumped 19%. Some of these weaker bearish hands could throw in the towel amid an extended rise in the stock price, which could provide additional tailwinds. 

skyw stock

A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

Huge New Legal Marijuana Market Has Shortage Crisis
250 million Europeans have access to medical marijuana. There's already a shortage....
Tiffany Stock Drops as Takeover Talks Dissipate
LVMH was to acquire Tiffany & Co in a billion-dollar deal
Coty Stock Glows Up with Possible Kardashian Cosmetics Line
The trendy cosmetics company is in talks with reality TV star Kim Kardashian West over a line of beauty products
The Next Big Player in U.S. MJ Boom
Most pure-play marijuana stocks in the U.S. trade on the Over-the-Counter stock exchange.