Today, Jerome Hass and Derek Warren commented about whether DRG.UN-T, SFD-T, ALGT-Q, WJA-T, DCI-T, PLI-T, BB-T, BBD.B-T, ACQ-T, NYX-X, TSGI-T, JKPTF-5, LIF-T, VEEV-N, GCG.A-T, CXI-T, BMO-T, SCL-T, CPH-T, GRC-X, DIV-T, HCG-T, ECI-T, BDGI-T, CLR-T, HOT.UN-T, REF.UN-T, SRU.UN-T, ACR.UN-T, RLC-T, D.UN-T, BEI.UN-T, IIP.UN-T, AAR.UN-T, KMP.UN-T, CUF.UN-T, FCR.UN-T, AX.UN-T, MST.UN-T, NWH.UN-T, RUF.U-X, CSH.UN-T, BPY.UN-T, TCN-T, CRR.UN-T, SIA-T, CAR.UN-T, SRT.UN-T, HR.UN-T, GRT.UN-T, TN.UN-T are stocks to buy or sell.
Short (and Long Allegiant Travel Company.) This airline, Air Canada (AC-T) and all airlines globally benefited from the huge drop in crude oil and jet fuel prices. A lot of the customer base for this airline is in Western Canada, so they are going to be impacted. Also, for the weaker Cdn$ it is going to be more expensive to travel abroad.
Long (and Short Westjet.) This company has a terrible fleet. In comparison Westjet has a better product, is a better company and has a better fleet. However, when jet fuel prices go down, you want the least efficient fleet possible. The bulk of their fleet is McDonnell Douglas 80s, which eat up a lot of fuel. When fuel prices go down, they are a huge beneficiary. Just reported a 100% increase in their EPS.
There are not too many oil/gas related companies that are trading at 5 year highs. Their business is helping companies explore for oil and gas, and a lot of their prime customers are the national oil companies, which tend to be revenue maximizing rather than profit maximizing. When crude prices halve, ironically they want to produce more in order to get the revenues to their client, which is the government. Just announced a very large deal, $13 million US, and are going to have 80% margins on that. They expect to start flying in this quarter and will probably finish the flying by the end of the 3rd quarter, so all that revenue will be reflected in there. Also have a full library of data that they are just starting to monetize, which they are going to inject into vertical oil/gas companies. With no capital on their own, they’re going to have a big stake in these companies. They’ll get a royalty stream from them as well as future business.
This is a call on Germany. It is more of an economic call. Dream Global went heavy into the German market. At the time, some of the transactions were wont to criticize. They now hold quite a good portfolio of assets. Most of the reports on this are very positive. He thinks it can continue to do well, as basically you are seeing German properties trade at more expensive values.