Opinions
David Cockfield
Westjet Airlines
WJA-T
COMMENT
Apr 10, 2015
$27.070
Stock price when the opinion was issued
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DON'T BUY
Considering the Boeing 737 crash. They came out with good numbers and guidance in the last quarter after a few bad quarters. Their suspension of the 737s is not a huge thing, but rather a nuance. He doesn't like airline stocks and prefers Air Canada that he just sold. This is not a bad entry point. Be careful: have a buy and sell price.
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PARTIAL SELL
There is some market risk in the overall market. It is an all cash deal. You will get $31 for it. There is a 4% difference between market and the deal. If you can do better than 4% somewhere else with a similar degree of risk, then you should sell. He would take some money off the table.
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COMMENT
A really interest deal with Onex. He has been a long term fan for years. His first professional 10 bagger. He is not convinced Onex over paid -- they probably saw this as a great time -- comparable to US peers. He thinks the regulators will approve the deal.
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His philosophy on airlines is “don’t invest”. He has seen too many airlines over the years go under for various reasons. It is in a good environment. The cost of fuel has gone down. Travel is definitely up. They should do quite well, but these stocks tend to be pretty darn volatile at times. It may be that an increase in the price of oil and jet fuel would be enough to knock these stocks right down again.