A buzz of fresh interest in SkyWest Inc. erupted this week after a top airline analyst praised the carrier's clever use of its cash to produce growth in a shrinking regional airline industry.

Since Tuesday, when Avondale Partners analyst Bob McAdoo told his clients that SkyWest is shrewdly using its surpluses, the company's stock has moved up almost 6 percent. On Friday, SkyWest closed at $13.47, a gain of 32 cents for the day.

"Investors have been ignoring the regional jet airlines, as overall U.S. airline capacity has been shrinking and historic regional jet growth has disappeared," McAdoo said in a research note in which he lifted his rating on the stock to outperform the market.

But, he added, SkyWest "has continued to grow by using its balance sheet to facilitate transactions during these difficult times."

Mike Kraupp, SkyWest's vice president of finance and treasurer, said McAdoo's words were a long-awaited affirmation of the airline's own view that its stock is under-apppreciated.

"We have felt like we are operating in a market where our stock is dramatically undervalued," Kraupp said Friday.

Unlike many airlines, he said, "we have continued to generate income quarter after quarter after quarter. So it's nice, from our perspective, that somebody is looking at us and saying there's some value in the stock."

McAdoo cited two examples of the St. George-based airline's innovative use of its cash:

• SkyWest has $746 million in cash on hand, almost as much as it's market capitalization — the price per share multiplied by the number of shares in circulation — which was $756 million on Friday.

In August, SkyWest agreed to buy ExpressJet Holdings for $6.75 a share, or $133 million. As it did when it acquired Atlantic Southeast Airlines in 2005, SkyWest is buying ExpressJet with cash.

The deal, which should be completed in the fourth quarter, will bring $800 million in additional revenues, reinforcing SkyWest's growing power. As a contract operator for Delta Air Lines and United Airlines, SkyWest already is the largest regional jet operator in the U.S. ExpressJet, the No. 2 regional airline, is the exclusive Continental Airlines contract carrier.

• Last year, SkyWest used some of its excess cash to loan $129 million to United, which was trying to build its own reserves. In return for the unusual airline-to-airline loan, United expanded and extended its contract with SkyWest.

Kraupp said SkyWest has also made a small investment in Air Mekong, a startup airline in Vietnam. SkyWest has been talking publicly since February about the possibility.

Last month, The Wall Street Journal said SkyWest plans to invest $7 million for a 30 percent stake in Air Mekong. The airline plans to start service in October with at least four aircraft acquired from SkyWest.

SkyWest has invested $30 million to acquire a 20 percent stake in TRIP Linhas Aereas, a regional airline in Brazil.

Kraupp said SkyWest continues to look for acquisition targets in the "distressed" U.S. airline industry, but reiterated that it is not looking at Comair, the struggling Delta subsidiary.

"Unfortunately, there are some entities that have had a fairly difficult time [and] we have excess cash with which we can create some opportunity."

SkyWest does not intend to put all its cash to work buying other carriers. Kraupp said it's possible that Delta and U.S. airlines will begin to expand their routes and capacity in about two years as the economy continues to recover.

If that happens, SkyWest will need money to meet the demand for more aircraft and flying hours, Kraupp said.

pbeebe@sltrib.com