RE:RE:GLTAPleasantly surprised that some people found my posts useful.
The deal with AC is a good deal, I think the timing of it is beneficial to Chorus more than AC actually. imo there will be a deal resulting in resumption of a lot more regional flights after the bailout/loan program for AC is announced which should be relatively soon. Chorus had a whole year of lease revenue advantage and traded it for more variable revenues just when i think the flight activity will start to pick up. However I think there will be a limit to how much they can earn from this as they are not a straight up airline. I think it's probalby a fair risk to reward ratio for Chorus.
Actual price valuation of the stock I'm terrible at. That said If you want to hear my valuation thoughts here it is. I've been thinking when i was investing earlier in Chorus that it should be a 10-12 dollar stock but i had revised my expectations downwards slightly due to the leasing side of the business. I think the room for growth for Chorus was the leasing side of the business and as I'm not seeing any activity I'm assuming there will be none at least this year.
I don't know if EDC is putting it's foot down on helping them get loans until they remarket or maybe even in general, in anycase the whole situation there is a question mark. I'm not familiar with credit worthiness and inclination of EDC and other financial institutions to be the financing counterparty to the leasing agreements
My more long term gripe with Chorus is it had started the leasing side of the business to diversify from the risk of having all eggs in one basket, most revenues being from Air Canada. When push came to shove (this current pandemic) they showed no signs in attempting to grow that business/ averaging down on airplane leases by starting new leases with new lower priced aircraft on the markets. They appear to not be in a rush to remarket the current repossessed aircraft. Instead to fix the problems, they focused on their agreement with Air Canada which they were working to get away from depending on.
Even without all of this i expect chorus to recover a fair bit more on AC alone as it seemed like a ton of analysts were constantly concerned about their AC side of the revenues.
With the possible upcoming joint venture from the interested investing party that could change.. but I'm not as bullish as before so I've decided to try out Aercap instead (once i can find a good entry point) who is doing what I would like chorus aviation capital to be doing, and other REITs doing the same thing, who bought heavy in the market in 2020 (residential housing). Also would like to return eventually to renewables utility operators for the stable PPAs and are set to benefit from clean energy stimulus from both Canadian and US governments, however a lot of this was already priced into the renewable sector, just taking this current correction for renewable sector as a buying opportunity to restart my position in it as all my investments used to be in that sector as i think i had mentioned