Lorne Steinberg Air Canada AC-T DON'T BUY Jun 27, 2024

It is buying back shares and did some cost cutting which could increase cash flow, but it still carries a lot of debt. It is a cyclical business and is battling U.S. giants. She wants to see a turn-around. If you own it continue to hold.

It is a trading opportunity and not a long term hold. There is still upside and there has been insider buying. It has announced an issuer bid. 18% of shares have been bought and cancelled in a year so revenue per share is going up. It is trading at a discount to its American peers and to its historical valuation.

Not compelling right now for transparently understanding where it could go to. With the tariffs, this business is something that could actually be on the table; the dynamics of the Canadian market might change dramatically. Makes most of its money off international flights.

Has been poorly managed for many years. Have a BB credit rating. History says that when things go well, they buy back a lot of shares, but don't touch their debt. They need a better balance sheet, stop issuing shares, and totally change of management style. The industry is so competitive that there is no consumer loyalty; consumers buy the cheapest flights online.

Planes to Europe are full. US will come back at some point. Every time a recession ends, travel blossoms. He's followed it for a long time and sees substantial upside. But airline stocks are very volatile. Thinks $31 is doable in the next 2-3 years.

He does not really take an interest in airlines. There may be an opportunity now for Air Canada with all the rhetoric around the strike. It's been around for some time. Settlement should not be a huge number for cost increases. It is looking to expand internationally. You could buy when the strike is settled and the price starts to rise.

if there is a resolution of the strike it could bounce back, but when. It has bought back 18% of its shares so it could be a $25 stock with fewer shares. Over the last five years it has been range bound but with wide oscillations. He sees it as a trading opportunity.

He got rid of it due to the choppy chart. Airlines are labour-intensive, subject to strikes, have high fuel costs, sensitive to the economy. 

Chart's showing it's neither here nor there. If it broke a bit below where it is now, as part of a longer-term downtrend, could easily see $10 range and you'd be best to sell and redeploy $$ elsewhere. Reasonable dividend.