Stock Watch will be a way for me to present companies I’m following with the hope of showing you investment potential. As opposed to my Stock Talks, I won’t be going in depth on one particular company, rather, I’ll be listing 2 or 3 that you should take a look at with a brief description of them/why I like them – do your homework as I am leaving a huge majority of information out of these posts.
This sessions stocks:
1. Jetlines Canada (Ticker: JET.TO) – Small Cap
Jetlines is a Canadian Ultra Low Cost Carrier (ULCC) currently based in Vancouver. They are developing a cost-efficient airline that will undercut the markets of Air Canada/West Jet and provide Canadians with cross-country flights (and eventually cross-continental) for under $100 CAD. You can learn more about their ULCC specifics/standard on their website. They have a strategic alliance with Boeing, allowing them to access plane fleets when needed (they have rented & on order). Their mid-2018 expected flight launch will set them off as the first ever fully-funded ULCC in Canada.
- First Canadian airline to be granted foreign ownership exemption – allows for 49% foreign ownership (past attempts at ULCC’s have failed due to a lack of funding – max 25% foreign ownership left them with few ways to find financing)
- Stan Gadek current CEO (20+ years of airline operation experience)
- Both Eastern and Western Canada operation centres already established
- Recent moves from WestJet & Air Canada show competitive scramble as the Canadian market is ready for a Ryanair/Spirit airlines comparable – first to market should succeed
Note of JET.TO – The stock has been quite volatile over the past few days, don’t take the recent increases as any indication of newly minted value. Although a very promising future, a large portion of the recent rise is due to speculation – do your homework before diving in. A portion of the rise can be attributed to volume, however, no news/announcements have surfaced to act as a basis for the surge. Be aware that airlines, especially newly-established ones, are very susceptible to hardship and the potential for failure is higher than usual.
Price at time of recommendation: $0.50 p/s
2. Ford Motor Company (F)
Ford is an American automaker that specializes in mid-to-high quality passenger automobiles, most known for their innovative design and build quality. Ford has struggled since the late-2000 recession but as the market for fuel-efficient/cost-efficient cars expands they are very well positioned to take advantage. Ford has built a sound reputation amongst Millennial’s/Gen-Z’s as being affordable and environmentally friendly. Award winning sedans (Focus/Fusion) and crossovers/trucks (Escape/Edge/F-150) have captivated car enthusiasts, and although wavering company news and a lack of foresight in the markets have led them to relative stagnancy, Ford will be a very strong competitor over the coming years.
WHY: (multi-year process – long term buy)
- New CEO is pushing leaner operations in an effort to streamline production and cut costs – huge impact on margins.
- New eco-initiative brings an entire line of EVC’s to compete in both the present EV race (with the likes of Tesla & Chevy) but to also set Ford up for massive future success as consumer demands shift.
- Unreleased Diesel Ford Ranger should reshape the small-truck market and boost sales – keeping their metaphorical eggs spread across several baskets.
- Currently paying a dividend yield of close to 5% (how can you pass this up).
Price at time of recommendation: $12.56 p/s
Disclaimer: The companies listed above are purely for research purposes and are not formal recommendations. I have held stakes in JET.TO for roughly 1-year and Ford for several months, therefore, all opinions are that of an investor confident in their success. Please do further analysis before making any investment decisions.