Cargojet Inc T.CJT.DB.F

CIBC Post Q1 Results

[DanielDarden]

The company also has excess capacity with its current fleet plan negating the need to acquire new aircraft even as volumes return. With CJT moving past trough earnings, we maintain our positive thesis on the name. Its recent revenue trends, especially in the domestic segment, continue to highlight the competitive moat around its network. CJT is trading at 7.7x our 2025E EBITDA, which we view as an undemanding valuation. We would argue that network-based freight transportation companies with inflation-plus pricing and high market share can trade at north of 10x EBITDA.

My Take: This seems to be a misunderstood company in a present day “Vital” segment of transportation. It is dominant in air cargo with Amazon, UPS, Purolator, etc. as customers who absorb all extra costs. They are virtually a pipeline in the sky with the ability to increase volume without additional expenditures. Eventually astute investors will catch on, meanwhile this is cheap relative to potential.

 

 

 

 

 

 

 

 

 

[BlackBear22]

Good call Daniel. You have to be patient but I think this is a good long term hold.  Seems to me that the stock has turned a corner lately and a new uptrend may have begun. BB