Still plenty of upside.... There has been a lot of back and forth on this stock - I hope many of you have been able to profit from those who provide meaningful insight and analysis....
As for Canaccord - it truly does baffle me - a thesis that seems to be 7 years out when there are many near term catalysts that can move the stock higher. The report seems to ignore facts such as cashflows and cost cutting measures - and seems to promote a thesis that is highly speculative at best....it borders on idiocy in my opinion and after the recent markup announcement - to dig your heels to reiterate a sell rating with the potential upside now in play - exposes a credability gap with Canaccord.
So far my track record on CHR.B has been 100% - back when I posted in July 2013 and bought in at an average cost of $2.17 (0.25% of the outstanding float) - and am remaining long for a variety of reasons.
a) I expect there may be some profit taking in the short term given the near 30% hike - however - there is no catalyst in the short term for the stock to fall back under the $3 per share range.
b) As mentioned in my article (on seeking alpha - "Has Chorus Prevailed In Its Arbitration WIth Air Canada) - yes - that was my article - if you didn't recoginize it - I merely extrapolated some of my comments on this site for the article)....Chorus will use this new found leverage to negotiate with Air Canada - which may take some time. They will likely trade margin for more hours and certainty beyond 2020.
c) Although I believe they are eager to return some capital back to shareholders in the form of a higher dividend given the market reaction to the dividend cut - I suspect they will not raise it to their previous levels given other captital demands - however - Its likley they will only make a call on raising the dividend after they have ironed out a framework with Air Canada - at which point - they will have better visibility on thier capital needs to make a call on what portion of the dividend to reinstate. I suspect it will be somewhere around 0.1125 per quarter now that they are sitting on a rather large cash pile that had been allocated to a potential backpayment to AC.
d) The two catalysts that make this a long term hold is a potential dividend hike and a deal with AC.
In the meantime - if you are one of the lucky few who locked in a yield at around 12-15% when it was trading in the $2 something range - you are better off (from a taxation perspective) to collect the dividend and receive a dividend tax credit versus cashing out on a sizeable capital gain.....long is the way to go.
Good luck,
PM