Opinions
Jason Mann
Chorus Aviation Inc
CHR-T
PAST TOP PICK
Jul 06, 2018
Stock price when the opinion was issued
You might be interested:
Like the larger AC, these shares have come off but are seeing a bounce. The reopening of more and more travel will benefit CHR. However, North American fundamentals in airlines may not be as strong as Asian or Europe. CHR could see less performance than the larger and more global Air Canada, but this bounce in CHR should continue for the next little while.
Converted to a leasing business of planes smaller than most major airlines use, one of the major players in the world in that space. Using cashflow to pay down debt. Talk of reinstating dividend, perhaps in 2 years. Dirt cheap. Buy it, put it away, it could be a double, though it may take a while. Undervalued.
He once owned it. The chart shows declining peaks since 2021, but int he past year shows a higher high and higher low. So, there's some potential. If it challenges its last peak of $3.50, it's a good sign. Are definitely some positives in this stock, so hold on and see if it breaks out.
He owned it before. They operate Jazz for Air Canada. They lease and maintain airplanes, a solid business, but all airlines have been wacked since 2020. It's now a cheap stock. The story will get better. It used to pay a 5-6% dividend, not now, as the balance sheet got stretched. But there are hopes that a dividend will return, which will attract more investors.
A great Canadian small-cap. The chart shows a nice uptrend, even after an August pullback. The street sees 10% upside, though it missed its last quarter. CHR has done very well in its repair/maintenance business. If you hold, continue to. Scores 6/10 for fundamentals.
(A Top Pick March 30, 2017. Up 4%). This is an example of a high-quality stock that has sold off as the market has chased growth. Airlines have been under pressure because oil prices have been rising. However Chorus doesn’t have this problem. They have no currency exposure or fuel exposure. They are purely an operator on a pass-through basis. They own the planes (JAZZ) but Air Canada owns the routes and subcontracts capacity to Chorus. As long as Air Canada is flying, Chorus makes its margin on the hours flown. They have a high dividend but only a 37% payout ratio. They trade with a high return on equity and are very cheap. They did an equity deal a few months ago that weighed on the stock, but they did it to grow their leasing business. There is no good reason for the declining price of this stock.