Air Canada (AC-T)

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.

Was $50 before pandemic, yet financials are virtually the same now as then. Massive upside. Being hit by sentiment left over from pandemic. Continues to tap into the US market. No dividend.

He never owns airlines. AC has failed to generate shareholder wealth creation historically. They take on too much debt, then buy back shares, then raise equity. Avoid. 

Capital structure not great, but company appears to be growing. Capacity to China/Asia growing. Fuel costs coming down. Would recommend buying - price could reach ~$40/share. Overall, is positive on the business. 

The chart is a good example of volatility so it is not for the timid. It is a swing trade candidate. If owned then hold onto it. He is not sure about buying. Medium odds of gaining.

It is very cyclical and rich in the current environment. Try for a short term trade, buying at around $13 to $14 and capping it at $16 or $17. You could write puts if you want.

Frustrating stock. Company missteps, fear of strikes. Travel demand still very high, and that will continue even if consumer pulls back. Stock's already been dealt the majority of pain. Valuation is quite good, sees significant upside even if it goes sideways for a while. No dividend.

A couple of quarters of strong earnings will take care of the stock, and ratification of pilots' deal will also be a catalyst.

On technicals, 200-day MA continues to trend lower, and the stock price is below that. Airlines in general have high debt levels, economic risk, sensitivity to the consumer, fuel price volatility.

He'd rather own a BKNG or EXPE, where there are no capital costs. Or even a cruise line, which has demographics behind it.

The pilot strike would be a big deal and cost AC a lot of money. This is not a good business, highly cyclical and competitive and prone to many things like oil prices. It's a trade, at best. Is cautious. A hold, not buy, until the strike resolves. Stay away from AC.