There are exceptions to every rule, including the generally sound advice to steer well clear of airline stocks. Alaska Air Group (ALK) has done well for investors by focusing on the disciplined operation of regional routes, and Copa Holdings (CPA) has followed a broadly similar strategy in across North, Central, and South America.
Investors
expect certain risks with airline stocks, namely volatile fuel prices
and revenue uncertainty stemming from often irrational competition and
the macroeconomic client. The ongoing mismanagement of Venezuela has
created another significant risk for Copa, as devaluation imperils the
company's significant cash holdings in the country and an escalating
spat with the government of Panama could threaten even more.
No
airline is a safe investment, but Copa looks well positioned to take
advantage of growing traffic across Latin America for many years to
come. The market appears to be all but writing off Copa's Venezuela
operations, and the shares look too cheap today.
Follow this link for more:
Ugliness In Venezuela Creating An Opportunity With Copa Holdings
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