Posts from the ‘Air Canada (AC)’ Category

Aug 20

Week 163: Knowing when you are not at an advantage

Portfolio Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Recent Developments

Note that this update is as of Friday, August 15th. I have been a few days delinquent in getting it out.

I have strayed from my bread my butter of late, away from the tiny micro-caps that pass everyone else by and into the world of still small but not so obscure caps. These are stocks like Air Canada, AerCap and Bellatrix among others, still far from being large caps, but big enough to receive the attention of analysts and funds.

I am not so sure of my own advantage with these stocks. I may be overstepping my own abilities to think that I can see something here the market is not. I am under no misconceptions about my research. There is simply no way that I, as an individual investor with a couple of hours of free time every day, can match the depth and scope of the research that the institutions have. Read more

Aug 9

Looking at more quarterly results: Air Canada’s miss

Air Canada is a fairly large position for me so I’ve spent a lot of time on their quarterly results in the last two days. The short story here is that the stock stock got hit because revenue per average seat mile (RASM) was below expectations and because of this, earnings were also below estimates.

There was an expectation among analysts that because load factors (how full the aircraft is) were strong in the second quarter, and because there was anecdotal evidence that ticket price checks showed improvement, Air Canada would pull off a decent year-over-year RASM increase in addition to its cost savings.

Because they didn’t the company missed earnings estimates and, on Thursday, the stock did what the stock did. The average estimate for earnings per share for the quarter was 51c. I saw that BMO was as high as 57c. The actual number came in at 47c.

First, let me say that I added to position on Thursday afternoon. I actually pretty much picked the short-term bottom on this one, a rare occurrence indeed, getting in at $8.50. I added because while the stock was down hard on the RASM miss, I thought that once everyone wrapped their heads around why, we would see it quickly move back up. Read more

May 20

2 Comments

Week 150: Stepping Back a little

Portfolio Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Recent Developments

For the last number of months I have been increasingly uncomfortable about being fully invested. Throughout the amazing rally that we’ve had since the beginning of 2012 I have been haunted by the idea that the rally is a liquidity induced euphoria . In particular, I am given humility by this chart. Read more

May 11

4 Comments

Week 149: Earnings Update on a few companies

This isn’t a complete portfolio update. I won’t be posting my performance or trades; I will leave that for another week. I just want to give a short update on some of the earnings reports that have come out or are still to come out while the thoughts are still fresh in my mind. Here is a quick snapshot of the top positions in my portfolio as of Friday’s close.

MagicJack

MagicJack earnings come out Monday after the market close. I’m nervous about them, because the stocks action has been poor, it is a large position for me and because I’m not convinced the numbers will be great.

The company lowered advertising spend significantly in the quarter in anticipation of the release of the new version of the device and the app. That will help costs, but it will also probably hurt revenue. On the fourth quarter call the company said that they expected the first half of the year to be “soft”. Read more