Opinions
Keith Richards
Westjet Airlines
WJA-T
DON'T BUY
Feb 02, 2016
$16.630
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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On a chart going back to 2012, there was a pretty nice upward trend line, and that broke down in early 2015, and pretty aggressively. Since then there have been multiple breaks of support. There was a level of support at around $24 that was tested recently, but it broke. At this point it took out another low from the summer. You are possibly going to find a bounce here, but he would want to see it bounce off the $16.50-$17 level and hold before he got involved.