AC STOCK Price FUTURESeeing the goofy posts by the dopey posters here, once again want to highlight this post by ROUGE10 who is a true shareholder and with serious experience in the airlines industry. At end of 2019, AC had not arrived at some climax in stock price. It was finally seeing the benefits of10 years of hard work and a turnaround strategy that was effective. These turnarounds usually don't work out in 8 of 10 cases. However AC took hundreds of actions over many years to create a leaner, highly flexible business that would be resilient without knowing that a black swan would be testing this resiliency. The actual target prices were already moving into the 65 range when Covid took hold. And that was without a true valuation on Aeroplan2. So the previous high in sp has no particular significance. Future SP will rise much higher even with dilution and added debts. Because the real hard work was done prior to Covid.
Here is ROUGE10's post: and I will bring it up again in the future along with some of Airlineinvestor posts. Have a fine weekend, all.
From ROUGE10 Real World AC Shareholder / Investor:
"And what if AC sells and lease back few of their planes and reduce their debt. At really good interest rates. With additional cash flow in coming years, they can easily camoflauge this under increased interest cost (which is lot lower since 2010). An average investor will only see lower debt and some level of increase in interest cost. Most won't even notice. Yes, they will have to buy back airlines and they can do it.
Point: Compare apples to apples. Most US airlines have lower aircraft ownership than AC. AC is better positioned.When US airlines were buying back shares from 2014-2019, AC was buying planes. Still AC has one of the lowest (was lowest in industry in March/April 2020) oustanding shares. Oh yes, US airlines are now starting to refleet their widebody and AC is done. There are so many points ....AC is better investment option compared to US airlines.
Any heavy asset intensive based business depends a lot on their ownership rates. This brings stability. AC learned from their mistake in 2009-10 recession and changed strategy for financial stability and since then it had been best positioned in industry (one of the best globally).
What most don't realize is that Aeroplan is another huge asset. Few US airlines have already leveraged their loyalty plans and AC hasn't even touched it. If only few investors understand the valuation of Aeroplan. 10s of billions of $$. Aeroplan alone can take the stock price close to 3 digits even if airline operations just break even.