This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

June 11, 2009 - AirTran Holdings, Inc. (AAI-NYSE) through its subsidiary, AirTran Airways, Inc., provides scheduled airline services in the United States. It operates primarily in short-haul markets in the eastern United States, with flights originating and terminating at its hub in Atlanta, Georgia.

Revenues will be down this year at Airtran, but profits will be much higher. Last year, the company showed a loss of $1.34 a share. This year, it should report a profit of $1.06. At least that's the consensus among the 9 analysts following the stock. Next year, they predict $1.01. Along with most other airlines, 2008 was a year to forget with losses for AirTran starting in the fourth quarter of 2007, followed by losses in every quarter of 2008. But the first quarter of this year showed a return to profitability.

The first period results came in at 21 cents a share, well above the loss of 38 cents a share in the same period last year. Some analysts thought the number would be 5 cents. AirTran management has been pro-active during this downturn and made some smart moves to improve results.

It sold or deferred delivery of 46 planes. It increased load factors. While traffic (defined as revenue passenger miles) was lighter by 6% in the first quarter, the company saw its highest first-quarter load factor in history, reaching 76.3%. Lower jet fuel prices also helped. Total fuel costs for the first quarter were down 50.5% compared to the same quarter last year. The company paid, on average, 47% less per gallon of jet fuel.

Some of the reasons for optimism on earnings: the company has reduced its exposure to higher jet fuel prices by using fuel hedging. Further, it bought interest rate swaps which put a ceiling on its borrowing costs. Both moves could prove very wise as the price of fuel rose in past weeks, and interest rates jumped noticably in the same time frame.

The stock had a tough 2008, staring at $9.10 and bottoming at $1.30. Investors kept seeing losses every quarter and wondered when they would end. When they started to see a turnaround, they piled back in, driving the stock to $8.70 last month. Now the price has settled back. Will it get back to its old high of $20.80 set in 2003? That year it showed eanings of $1.21 so it's a possibility if analysts are right in their projections.

More numbers: Price to sales is .27. Since profits have been non-existent before the first quarter, all 12 month figures such as Operating margin, Profit margin, Return on assets and Return on equity are negative. Revenues for the last 12 months were $2.50 billion. Total cash is $384.32 million. Total cash per share is $3.20. Total debt is $1.09 billion. Debt to equity is 3. Current ratio is .85. Book Value per share is $2.58. Price to Book is 2.18. There are 119.94 million shares outstanding with a float of 104.23 million. Insiders own 8.06%; institutions have 80%. There is no dividend.

AirTran is making a strong comeback. With hedging in place for fuel and interest rates, it should continue to show profits. But if the load factor falls due to further economic slowdown, there's nothing the company can do except fly lighter planes. Still AirTran ranks very high in service performance both in terms of on-time performance and fewest customer complaints. That makes passengers want to come back, but it also suggests that future expansion should come easier when the economy turns around. If you're an aggressive investors, check this one out further.

Company Web site: www.airtran.com

- Ted Allrich