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AC.B - Air Canada

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[OP]
Newbie
Aug 29, 2009
52 posts
9 upvotes
Toronto

AC.B - Air Canada

Would you invest in it at the current price? Why or why not?

It seems like they are expanding their business to fly into Asia and have had strong Q3 results along with an upgraded rating by TD. Are they on a road to recovery or are they just a company cursed with financial bankruptcies?
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Feb 15, 2008
26318 posts
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Calgary
AC will have its ups and downs, but the long-term trend is down. The company is a basketcase in terms of how it manages its labour. The company operates in one of the highest cost areas of the world and has little hope of competing with the Asian or European carriers that send their aircraft to Canada. There's nothing to suggest that they've done anything to restore morale in the company. Do yourself a favour and buy a railway stock or something -- this sector really isn't one that all but the most sophisticated operators can make money on.

IMHO, the company has a long ways to go before its no longer dangerously under-capitalized for the long-term, and a Canadian housing decline/crash is likely to hurt this company significantly. Unlike 20 years ago, most of AC's passengers are leisure/discretionary passengers, not the business travelor -- and the leisure/discretionary market is highly vulnerable to a domestic consumer slowdown.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Fanatic
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Dec 21, 2005
5334 posts
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Markham
Rode it up when it sank below $1 the last time around (late 2009? Cant remember) Missed the opportunity to buy below $1 again earlier this yr; a bit surprised that it jumped back up so quickly -- up like 80% since Sept
:idea: :) :lol: :razz: :D
Sr. Member
Mar 19, 2010
918 posts
104 upvotes
Markham
ccyk wrote: I don't like airlines. as a whole, the airline industry has not been making money.
+1. No earnings and no dividends. Better places to invest your money.
Deal Fanatic
Sep 23, 2007
5061 posts
1150 upvotes
The whole industry is too competitive. It's hard to make good profits. It's also a somewhat regulated industry. Combined with labour constraints (unions) in Canada, it's not a recipe for success. I also think fuel prices are never going down. The easy to harvest stuff is already out. The cost of getting fuel can only go up.

Sure, one could say that the stock is cheap. If you bought it a few months back you'd have a tidy profit. But they also could have just went bankrupt too. Expansion doesn't guarantee profits. This is more or less the story of airlines. Air travel saw a huge boom a few decades earlier. But this did not translate into profits.
[OP]
Newbie
Aug 29, 2009
52 posts
9 upvotes
Toronto
Appreciate the input guys. I was thinking more of a short term investment (2-3 months) and Air Canada caught my eye as they were number two on the list of insider trading volume according to the TMX.

http://www.tmxmoney.com/HttpController? ... anguage=en

I never liked air lines myself but I just wanted to get the boards opinion on this one.
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Dec 21, 2005
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Streetthispgt wrote: Appreciate the input guys. I was thinking more of a short term investment (2-3 months) and Air Canada caught my eye as they were number two on the list of insider trading volume according to the TMX.

http://www.tmxmoney.com/HttpController? ... anguage=en

I never liked air lines myself but I just wanted to get the boards opinion on this one.
Keep in mind that the TSX filings could be insiders, officers or a fund with a large # of shares. Only SEDI filings are truly insiders -- and who's to say that insiders cant be wrong

I know insiders have been loading up on CPG, LEG, AGF and CQE. You can see summary reports at www.canadianinsider.com

I know TD also provides daily commentary/summary of insider transactions.
:idea: :) :lol: :razz: :D
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Feb 15, 2008
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The 'insiders' generally don't take their own money to buy shares -- they are given shares through employee stock option programs and/or other share-based executive compensation programs. I find it highly unlikely that AC's management has ever taken a dime of their *own* money and put it into the company stock.
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Jun 26, 2005
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There is NEVER a good time to long (buy) Airline stocks.

Fuel never gets cheaper, government doesn't always bail out their own country airlines, and pricing is extremely competitive, so no one can raise prices too much over the next.

There are tons of other companies you can invest your money in. Stay away from airlines and drugs (companies)
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Feb 19, 2010
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Hmm. I've done quite well with Westjet. Can't tell me there's NEVER a good time to buy airline stocks.
Jr. Member
Sep 1, 2011
136 posts
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rfdrfd wrote: There is NEVER a good time to long (buy) Airline stocks.

Fuel never gets cheaper, government doesn't always bail out their own country airlines, and pricing is extremely competitive, so no one can raise prices too much over the next.

There are tons of other companies you can invest your money in. Stay away from airlines and drugs (companies)
Great post for a Technical guy!
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Jun 26, 2005
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vfmx86 wrote: Great post for a Technical guy!
Its called rule based trading. You scan for stocks, then you kick out the bad ones according to rules. This prevents you from getting into wrong stocks using technicals.

Even a science guy doesn't mean he will never go to Church. I'm sure you know friends like that. Again, keep an open mind.
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Jun 26, 2005
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Conquistador wrote: Hmm. I've done quite well with Westjet. Can't tell me there's NEVER a good time to buy airline stocks.
that's called being rewarded for bad behavior. How about all the other airline stocks? Canadian, LCC, AMR, ..... you were lucky with Westjet. It also depends on when you bought Westjet. If you didn't time it, and bought it at 23, you'd still be negative.

Luck isn't a method to be consistent in profiting in the stock market.
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Dec 21, 2005
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rfdrfd wrote: that's called being rewarded for bad behavior. How about all the other airline stocks? Canadian, LCC, AMR, ..... you were lucky with Westjet. It also depends on when you bought Westjet. If you didn't time it, and bought it at 23, you'd still be negative.

Luck isn't a method to be consistent in profiting in the stock market.
You can time any stock in any sector. Call it luck or whatever you want. AC reversed course back in May 2009 and shot up from $0.90 to $4 by Dec 2010. Then gradually falling back to $1 over the course of 2011 & 2012.
There were multiple opportunities to buy AC below $1 -- as recently as September this year.
:idea: :) :lol: :razz: :D
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Feb 19, 2010
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rfdrfd wrote: that's called being rewarded for bad behavior. How about all the other airline stocks? Canadian, LCC, AMR, ..... you were lucky with Westjet. It also depends on when you bought Westjet. If you didn't time it, and bought it at 23, you'd still be negative.

Luck isn't a method to be consistent in profiting in the stock market.
Says you.
Member
Feb 29, 2008
314 posts
102 upvotes
GTA
Sold 75% of my holdings today. Nice 70% profit
Newbie
Jan 14, 2013
10 posts
Toronto
2.30 today...I see this reaching 3.50 in no time.

Union took a hit on the last contract, and the company is clear to make money hand over fist for the next couple years....as long as they don't botch the new low cost carrier.
Newbie
Aug 23, 2012
97 posts
Last year was funny. Didnt each different union take turns going on strike? The pilots, then flight attendents, then baggage handlers, etc. How many days of the year was it operating normally?

Even if you are the most liberal minded, you must agree this union business is ruining the company. And its not even a once in a while thing. Its a routine dance. Its like t hey do this every year.

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