Air Canada (AC.TO)

Generally likes the airlines. Cdn$ has been causing a bit of headwind, and is not quite being offset by fuel prices. If you step back from all the short-term moves, such as jet fuel and currency, they have been doing some great things. They are really revamping their business. For the last 3 months their numbers have been out of the park. Expects this quarter is going to be a good one.

(A Top Pick Oct 16/13. Up 59.72%.) Sold his holdings. It had broken down from his process. Provided the economies stay strong, airlines should continue to do well, especially now that they have added in the baggage fees.

This is volatile. Fuel costs coming down is clearly a benefit for them. Offsetting that is a weaker Cdn$. The industry seems to be getting a lot more disciplined. Thinks the stock goes higher over the next couple of years.

(Top Pick Oct 10/13, Up 54.29%) He has recently rotated to West Jet. There is better consumer spending and better load factors. He still has a small weighting.

This has been volatile short-term. Long-term it has done fairly well. Fuel costs coming down and introduction of the new airline Rouge are positive developments. A year from now, you are going to see volatility continue. If the markets started to get into trouble, this is one of the 1^st things you would want to sell. Not a huge fan of airlines, but would focus more on the bond issues for the airline hubs.

Transportation does well from mid-October to mid-January when people fly south or for Christmas. It worked out well the last two years. A bit of a downward trend right now, below its 20 day moving average and underperforming the market slightly. Hold it if you own it or watch for the technical signals to turn positive.

(A Top Pick Oct 16/13. Up 73.15%.) The story hasn’t totally played out yet. He was seeing their cost controls really coming in line. At the same time they were starting to ramp up their revenue. They are now charging a baggage fee which is revenue that drops to their bottom line. There is still room for them to expand their international routes, where they get a little bit higher margins. Earnings could still go higher which will move the stock higher.

This is only part way through its turnaround story. Cheap relative to the history of airline stocks and current peer valuations in the US. Lots of good things are happening and she would be patient with this.

(Market Call Minute.) This is the end of an economic expansion, but it still has a high cost structure. If you want to be in a Canadian airline, be in Westjet (WJA-T).

You have to have strong stomach. Your upside is that much more because of the volatility. They improved their cost structure dramatically, usage is higher and you are getting some interest from international investors.

Likes this for the torque you are going to get. It is volatile. They have a plan in place right now to strip costs out of the business. They’ve got Rouge which is starting to pick up again. The risk is coming out a little bit, which means the multiple is going to start to move up even more.

Cheaper oil prices should be a huge lift for airline stocks. They are expanding capacity on the Atlantic. He is not a buyer. He is concerned about Delta setting up an international hub in Seattle.

(A Top Pick Oct 16/13. Up 73.35 %.) They continue to drive costs out of their system, but at the same time continue to increase their revenue. As well, they are flying more international routes now which are more profitable for them.

(Market Call Minute.) He would still buy it in here. Have had earnings upside and still has cost cutting. Well-positioned.

(A Top Pick Oct 16/13. Up 94.89%.) Feels there continues to be growth here. The business cycle has been expanding, and there are more overseas flights which is where they make some money. Also, they are working on cost controls.