Transat AT Inc. (TRZ.TO)

(Top Pick Dec 19/14, Down 30.35%) The story is still in place, but the Canadian dollar did not work and hurt them. The industry has added capacity.

Airlines in general have done well off the cyclical low but not an area that she tends to invest in because they are so cyclical. Airlines is a secular growth area, and she would rather buy companies that produce or service the airline sector. The risk going forward is if fuel prices start to improve.

(A Top Pick Sept 23/14. Down 13.54%.) He liked it when it was cheap a year ago, and he likes it now and it is still cheap. Earnings forecasts have held up. A good value stock. The kind of thing you can sit on and not worry about getting wiped out.

It is risky especially if we go into a recession. It may be a buying opportunity if it gets low enough. He is not a buyer though. He thinks they have a good cash balance, but sentiment could drive it down.

Looks quite cheap compared to other airlines, but he would caution you. If you look back 24 months ago, and then look back 3-4 years ago, they have these exceptional periods of growth, and then they tend to mess it up and come falling back to earth. After seeing this happen a few times, he has moved to the sidelines on names like this.

Would not touch this stock until it had a positive transit of over $8. The market doesn’t believe its balance sheet, it is too large. Hopefully somewhere along the line they are going to write off some assets, and once it has a positive transit over $8, that will give the all clear signal.

(Top Pick Mar. 24/14, Down 29.08%) He sold when it violated one of his technical points. The killer was not oil, but the rapid rise of the US$. He had a good position and said ‘forget it’.

Not really an airline per se, but is really a travel company. They own the hotels and the destinations. That has always been a lumpier business which has impacted the stock. They are sitting on almost as much cash per share as the current share price, so you are getting almost the operating company for free, and it is generating $100 million in operating earnings. Have done a restructuring on their transatlantic routes because they were losing money in France, but have done a lot to drop the costs there. Now they have to fix their winter destinations a little bit. Very cheap.

A tough business, specific destinations. It is a low margin business. The only good thing for them is low fuel costs. He would not invest in it.

He is unlikely to ever own an airline. Now would be a good time to trade airlines. But if you look at Transat, they are really in the holiday business and the airline is really a conduit to filling hotel rooms. The leverage for Air Canada and the like is much larger than for Transat.

(A Top Pick Oct 24/13. Down 26.69%.) This should be benefiting from lower energy. About a year ago, the quarter was pretty good. West Jet and Air Canada were competing with them.

Had recommended this earlier in the year and it hasn’t done a good deal. This has a remarkable seasonal characteristic in that starting in Sept, Oct and Nov, it tends to move strongly into year end. It has been doing this for years and years, even in bear markets.

Volatile and it is frustrating. Their margins get impacted dramatically and the stock goes up and down. You are paying almost nothing here for the operating of the company. It could easily be trading at the mid-teens and the cash flow would protect it. He would have no problem adding to it here.

Never liked the airline industry. But they are good trading vehicles at times. Had a pullback after a breakout, now testing support. Looks okay for a trade but don’t look for it to do wonderful things over the next 6 months.

Stock plunged to about 70% of Book Value, so it’s a 30% discount to Book. You have to like that. It has a superb balance sheet. Their cash has got stronger and stronger and stronger as time has gone on. Their sales were strong.