TSX: CHR, AC, EIF, ONEX

[FL-200]

Alright my airline friends, I know you all have opinions about this, time to let it out!

Who’s going broke, who’s going to struggle, who will take all in the post virus afterscape. If you had $1,000,000 to place on one of them, who would you pick? And GO

CHR?

AC?

ONEX?

EIF?

[snowcrest]

Invested in AC at the moment, with a plan to buy more should the price further drop. CHR is going to become a penny stock real soon so I wouldn't bother looking into it.

[CL-Skadoo!]

I put it all on 34 red.

[montado]

I would take 5k and put it on Transat puts that expire in a couple months. Then I would take the rest and put it in VGRO.

[tbayav8er]

I wouldn't be putting my money in airline stock of any sort right now. Yes, AC has been going up and down in big swings, so people have been making money. I'm not really into day trading. I look at what I can invest in long term. When the second wave of the virus comes, airline stocks are going to be in even more pain.

Personally, all my money is just on the sidelines right now. Probably going to invest in some oil companies as well as banks. Oil is starting to go back up in value, and we will always need oil. That's just me. If Warren Buffet is selling his airline stocks at a loss, then it's probably a pretty risky investment. Also, when I first started investing, I was told never to invest in the same sector I work in, because if there's a downturn in your industry, you take a double hit. Possible job loss, in addition to loss of value in your investment.

AC was $21.65/share on April 29th. Now, it's $16.56. At a very minimum, I would at least want to see a couple weeks of either stability, or somewhat steady increase in value.

As far as CHR, ONEX and EIC, who knows? I'd rather buy RBC bank stock and rake in the 5% dividend.

There are lots of good, relatively safe investment opportunities out there right now that will have solid gains over the next 2-3 years.

Those of you investing your money in airline stocks - Maybe I'm missing something. I'd definitely be interested in hearing your method of setting a price target to know what price to buy at.

[200Above]

I did well with WJ before the ONEX purchase. If ONEX paid a higher dividend, I'd probably let some pesos ride with them.

I worked at an EIF company years ago and made enough in my RRSP from contributions/dividends for the first time home buyers plan and subsequently sold most of my shares.

I have AC shares that are way underwater, but I was enrolled in the Employee Share Ownership (I get anxiety with this word, thanks WJ) Plan and averaging down as much as I could.... until AC cancelled the plan.

I'm back into EIF, as their share drop was extreme a couple months ago. Bought in again and I've signed up for the DRIP long term. I'm holding these in my Dividend portfolio, in a non registered account to take full advantage of the dividend tax credit.

I know CHR has a good dividend (or did at least)... nothing against them, just wasn't interested. Maybe I'll add in the future. I'd have to look at allocation though, that's a lot in aviation/ transportation sector.

So I'm biased, but I'd like to see EIF and/or AC be winners and I've put my money as such.

[BigQ]

As a pilot, why put your investment money into the airline stocks?

diversify your investments of money and time!

[whistlerboy02]

I asked my Investment advisor about buying AC stock and this was his reply:
The tricky part for investors is figuring out if a bailout is going to come, and then if it does how does it effect shareholders. For example, when the government bailed out GM during the 2008/2009 crisis the company was able to keep going but stock holders got 100% wiped out.
Since then Warren Buffet sold all his airline stock

[GoinVertical]

I would take 5k and put it on Transat puts that expire in a couple months. Then I would take the rest and put it in VGRO.

I'm not seeing any options for Transat listed... wanted to buy puts and shares

[goingnowherefast]

AC

They're the only one that seems to have a recovery plan. Everyone else seems to be muddling along all doom and gloom with no real plan or optimism. CHR will be follow along with AC because of Jazz.

But yes, diversify. Our paychecks comes from the aviation industry, investing in aviation seems to be putting a lot of eggs in one basket. Banks are probably pretty safe, or just mutual funds and let somebody else decide which stocks to trade.

[fishface]

I would take 5k and put it on Transat puts that expire in a couple months. Then I would take the rest and put it in VGRO.

I'm not seeing any options for Transat listed... wanted to buy puts and shares

Not a big options guy - I do know the basics, but wouldn’t buying puts and buying shares long be counter productive? Are you doing that to hedge your position?

[GoinVertical]

Are you doing that to hedge your position?

I only putter around in options, but Yes... buying the shares gives you the benefit of the transaction goes through at $18, buying the puts gives you the benefit if it plummets. In this case there's a good likelihood it will do either with not much chance of the price staying where it is, so that's what I wanted to do. Can't find any options listed though so the point is moot.

[FL-200]

I wouldn't be putting my money in airline stock of any sort right now. Yes, AC has been going up and down in big swings, so people have been making money. I'm not really into day trading. I look at what I can invest in long term. When the second wave of the virus comes, airline stocks are going to be in even more pain.

Personally, all my money is just on the sidelines right now. Probably going to invest in some oil companies as well as banks. Oil is starting to go back up in value, and we will always need oil. That's just me. If Warren Buffet is selling his airline stocks at a loss, then it's probably a pretty risky investment. Also, when I first started investing, I was told never to invest in the same sector I work in, because if there's a downturn in your industry, you take a double hit. Possible job loss, in addition to loss of value in your investment.

AC was $21.65/share on April 29th. Now, it's $16.56. At a very minimum, I would at least want to see a couple weeks of either stability, or somewhat steady increase in value.

As far as CHR, ONEX and EIC, who knows? I'd rather buy RBC bank stock and rake in the 5% dividend.

There are lots of good, relatively safe investment opportunities out there right now that will have solid gains over the next 2-3 years.

Those of you investing your money in airline stocks - Maybe I'm missing something. I'd definitely be interested in hearing your method of setting a price target to know what price to buy at.

I like your post sir!

Why should a pilot invest in airline stocks? Because airlines are within our circle of competence. We work for airlines, we understand them, we have our ear to the ground with them and know how they make money!

Of course it’s risky. We could loose our savings AND our job in the same event, so it should never be a majority position in our portfolios.

Personally I like EIF and CHR. Chorus has an inflexible And large contract with AC and a decent leasing business around the world. EIF is well diversified outside aviation, and its Northern Aviation defines the word “essential”.

It’s interesting to hear how other people think about it.

[FL-200]

I did well with WJ before the ONEX purchase. If ONEX paid a higher dividend, I'd probably let some pesos ride with them.

I worked at an EIF company years ago and made enough in my RRSP from contributions/dividends for the first time home buyers plan and subsequently sold most of my shares.

I have AC shares that are way underwater, but I was enrolled in the Employee Share Ownership (I get anxiety with this word, thanks WJ) Plan and averaging down as much as I could.... until AC cancelled the plan.

I'm back into EIF, as their share drop was extreme a couple months ago. Bought in again and I've signed up for the DRIP long term. I'm holding these in my Dividend portfolio, in a non registered account to take full advantage of the dividend tax credit.

I know CHR has a good dividend (or did at least)... nothing against them, just wasn't interested. Maybe I'll add in the future. I'd have to look at allocation though, that's a lot in aviation/ transportation sector.

So I'm biased, but I'd like to see EIF and/or AC be winners and I've put my money as such.

I also bought more EIF shares during this dip. I’ve been thinking about buying AC shares, but I’m waiting for AC to be priced single digit before I do. AC is at risk of becoming a penny stock I fear...

[FL-200]

I’m starting to think that CAE might be the best way to play the Canadian aviation sector. Pilot training should recover before the airlines do?

[tbayav8er]

I’m starting to think that CAE might be the best way to play the Canadian aviation sector. Pilot training should recover before the airlines do?

CAE is a great company, and I believe they also have some interesting things in the works for future military training. The already have the YMJ contract that they got from Bombardier.

[FL-200]

I’m starting to think that CAE might be the best way to play the Canadian aviation sector. Pilot training should recover before the airlines do?

CAE is a great company, and I believe they also have some interesting things in the works for future military training. The already have the YMJ contract that they got from Bombardier.

That’s awesome.

I looked at thier quarterly results they just posted. Sounds like they are handling COVID well, even tho they cut thier dividend.

I’m putting together a small aviation portfolio, Exchange income, Chorus and CAE will make the bulk of it with minority positions in AC and Onex... and I don’t know WTF to do with Cargo Jet haha. CJT has been over priced for years and it’s still going up, maybe it’s time to bite the bullet and pay 177x P/E, as offensive to my sensibilities as that is....

[McKinley]

I’m starting to think that CAE might be the best way to play the Canadian aviation sector. Pilot training should recover before the airlines do?

CAE is a great company, and I believe they also have some interesting things in the works for future military training. The already have the YMJ contract that they got from Bombardier.

That’s awesome.

I looked at thier quarterly results they just posted. Sounds like they are handling COVID well, even tho they cut thier dividend.

I’m putting together a small aviation portfolio, Exchange income, Chorus and CAE will make the bulk of it with minority positions in AC and Onex... and I don’t know WTF to do with Cargo Jet haha. CJT has been over priced for years and it’s still going up, maybe it’s time to bite the bullet and pay 177x P/E, as offensive to my sensibilities as that is....

You’re aware of this right : https://www.bnnbloomberg.ca/chorus-avia ... -1.1417886

I imagine Chorus aviation will fail to exist in the next 12 months.. AC could be too large to fail but Chorus is easily replaceable by any 704-705 currently in existence.

Mind you, you did say a small portfolio...

[FL-200]

I imagine Chorus aviation will fail to exist in the next 12 months.. AC could be too large to fail but Chorus is easily replaceable by any 704-705 currently in existence.

Mind you, you did say a small portfolio...
[/quote]


What that article failed to mention is that chorus doesn’t get paid on the amount of flying it does, they are paid on a fixed contract with guaranteed minimums from AC, even if Jazz stopped flying completely, Chorus would still send a bill to AC for the minimum amount, and AC would have to pay.

Thier leasing business at Chorus Capital hasn’t been impacted much at all, (only 8 tails and up for remarket so far), which makes up %10 of thier total revenue, plus Nova Scotia medevacs and Voyageur which are barely impacted, which makes up about %5.... so roughly %15 of total revenue is outside of AC CPA and is doing great (so far).

Similar contract revenue from AC while paying less wages and no dividends should increase net income per share. Or that’s the thesis anyway haha, we’ll see how it plays out.

And yes, small portfolio, this sector scares me lol.

[FL-200]

CAE is a great company, and I believe they also have some interesting things in the works for future military training. The already have the YMJ contract that they got from Bombardier.

That’s awesome.

I looked at thier quarterly results they just posted. Sounds like they are handling COVID well, even tho they cut thier dividend.

I’m putting together a small aviation portfolio, Exchange income, Chorus and CAE will make the bulk of it with minority positions in AC and Onex... and I don’t know WTF to do with Cargo Jet haha. CJT has been over priced for years and it’s still going up, maybe it’s time to bite the bullet and pay 177x P/E, as offensive to my sensibilities as that is....

You’re aware of this right : https://www.bnnbloomberg.ca/chorus-avia ... -1.1417886

I imagine Chorus aviation will fail to exist in the next 12 months.. AC could be too large to fail but Chorus is easily replaceable by any 704-705 currently in existence.

Mind you, you did say a small portfolio...

From the Q1 earnings report.

“ In accordance with the CPA, the fixed margin does not vary with the number of aircraft and is fixed for 2020 based on agreed annual amounts.

Chorus estimates the Controllable Cost Guardrail receivable from Air Canada under the CPA could increase between $20.0 million and $40.0 million by the end of 2020 as compared to 2019 due to the uncertainty surrounding the required flying schedule.”

So, stock price goes up? Haha worth at least a grand In the long term portfolio anyway.