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Elliott Fishman Westjet Airlines WJA-T SELL May 10, 2018

Airlines, autos are the kind of stocks he trades on a short leash. A drop in big volume that the one they just had is never good. Going to have some headline problems in the short term.

Elliott Fishman

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$19.590

Stock price when the opinion was issued

Transportation

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WAIT

They are going international but competition is increasing from other countries at the same time. They have started to consolidate and are forming a base. He thinks we will consolidate for a bit yet. In November and December are good times for this airline.

DON'T BUY

Likely would not own it right now. He doesn’t think the Canadian economy is quite as strong as what the government is saying. He expects oil prices to rise which means higher input costs. However there are better places to put your money. Nothing wrong with the company.

HOLD

He's had mostly bad experiences with airline stocks over the years. WJA's recent numbers look good, and he doesn't see less travelling in North America. WJA has done some profit-protecting moves and should do okay. They've corrected with their recent numbers.

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.

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.

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.

BUY

Schwartz of Onex saw that WJA was running at a deep discount. He's confident that Schwartz can obtain the same results as Air Canada. Kudos to him.

COMMENT

The only way it goes higher is if there's a white knight out there, but he doesn't see anyone paying more than Onex. Tech analysis has nothing more to add, because the stock moved up to the offer price of the cash takeout.

HOLD

Will the Onex takeover happen? Q3 earnings muted but beat the street. The deal will go through, so not much has happened to the stock (and won't sell off).

SELL

It’s under review by the government whether the takeover will take place. You’re dealing with regulatory uncertainty right now. If you bought it before the takeover, unless you’re in tune with what will happen, he wouldn’t own the stock any longer. The price is fair.

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Elliott Fishman Westjet Airlines WJA-T SELL May 10, 2018

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