Air Canada (AC-T)

It is trading near the levels seen at the early stages of the pandemic. Trade war fears have dragged down the airlines but this is overdone. Air Canada is at an 80% booking level which is normal. Its flights to the U.S. are down but international business is strong. It makes more money on international flights than domestic. The price is still OK.                             Buy 14  Hold 2  Sell 1

Airlines are a a very tough business to invest in. Highly volatile, highly levered. Not for him. He likes recurring revenue, visibility on revenue, and easy to play. You're flipping a coin.

A high-risk opportunity. Traffic to US is down. In the US travel is down, but revenues are up because people are paying for executive class. AC can do the same thing. Tariff noise will soon abate.

One of the most economically sensitive names. To buy now, you need a rosy economic outlook but uncertainty is squashing that. Valuation's come down massively. High fixed costs. Not enough defense as we stare down a recession.

Over last 5 years, hasn't generated much stock price appreciation. Trading stock, not buy and hold. New capacity coming to market, consumer being more cautious. Not great environment to buy. Cashflow will be under pressure.

Airline stocks are not long-term holds. Travel is discretionary, especially for pleasure. Most profitable part is business travel, which won't make a full recovery to pre-Covid levels. Air travel to US is suppressed. CAD at this low level doesn't bode well for overseas purchasing power. Massively leveraged balance sheet, plus looming tariffs.

It has rebuilt its balance sheet and the valuation is well below the historical average. It has lagged the U.S. airline stocks even though it has initiated a 12 month share buyback program. It is at a lower price today than the price for share buybacks, recent option offerings and insider buying in February. Travel should come off a bit but not as much as the drop in its stock price.         Buy 13  Hold 4  Sell 0

Airlines are economically sensitive stocks. Technically, the chart shows a base, which suggests a swing trade. If, and only if, AC arcs up with definite conviction off support of $15 or so, it could head close to $24 (though might not quite make it).

Don't do it until it breaks out. Plus, you'll need a fundamental reason (such as Trump backing off tariffs).

Deferred capex, a positive. Flexibility with its fleet. Strong balance sheet. Under 6x PE, way cheaper than US peers. Softness this year due to tariff uncertainty, sees growth returning in next couple of years. If tariffs don't go on, a nice buy. Put it in a non-registered account as more of a trading stock.

Does not find business attractive. Airline business very hard - high capital requirements with low margins. Would look elsewhere in the markets. 

Powerful brand, great loyalty program, flights seem full. Concerns around trade war and cancelling US trips. Hurt by weak CAD, so concerns around input costs and margins. Buying back stock. Low valuation, decent time to look at it.

Does not invest long term in airlines. Business very hard - capita requirements very high, with low margins. Few barriers to entry - lots of new competitors. Oil prices are volatile - which creates difficulty in costs. No dividend makes this company hard to invest in. Better options elsewhere. 

No. At a level of support around $20, a pretty strong move. Weak technicals, definitely in a downtrend, messy no-man's land. If we were earlier in the cycle, he'd support its trying to find a base here. Late cycle is big for energy; for airlines that aren't unhedged, that's going to be a big headwind as input costs come under pressure.

His team likes EIF, so take a look at that name.