Air Canada (A) (AC.A-T)

This stock actually has upside. It is probably undervalued about 20%. They are expanding their capacity about 9%, upgrading some aircraft. United Airlines trades at 50% of revenues. Air Canada is at 20%. If they can pay down their debt then the stock has upside.

Spent the brutal years tidying itself up and the airlines are on an upturn. The company seems to be on a role. It is probably still going up from here, but he would not buy it now.

There could be quite a bit of upside. They were managed quite stupidly for a number of years. But now there is a danger from the discount airlines. The debt load is still heavy. He could see it for a good momentum play.

The only word for airline stocks is ‘Youza’. It has been almost parabolic. They have had a couple of regular periods of consolidation. Don’t buy now, but wait for a consolidation.

[Did not specify the .A or .B shares] Airline industry collectively has never turned a profit. Bad place to invest. But you can trade it.

9.25% Senior Secured Notes maturing Jan 8/15. This has a tremendous amount of asset coverage. Have roughly $1 billion in debt at this level and there is more than $2 billion that is covering it. Fundamentals for Air Canada continue to improve, almost on a daily basis.