Seeking Alpha: Copa Holdings Looks Undervalued, But Its Markets Likely Haven't Bottomed

Copa Holdings (NYSE:CPA) and Alaska Air (NYSE:ALK) make for an interesting study in contrasts. Both are well-run airlines by most of the metrics that matter, but they operate in very different markets. While Alaska Air continues to benefit from a benign-to-healthy U.S. airline industry environment, Copa is getting crushed by economic turbulence in major markets like Brazil, Venezuela, and Colombia. Since the time of my last article on Copa, the shares have fallen more than 40% while Alaska Air's shares have climbed nearly 25%. That Copa has outperformed GOL (NYSE:GOL) and Avianca (NYSE:AVH) is true, but doesn't put any money back into shareholders' pockets.

I do believe that the current share price discounts the long-term value of Copa, but it's hard to make money in the midst of weak reported results and lower expectations. Likewise, it's worth at least asking why investors should expect any meaningful turnaround in Brazil, Venezuela, or Colombia in the near term, as these are all commodity-driven markets that need a combination of higher oil, base metal, and agricultural prices to lead a turnaround.

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Copa Holdings Looks Undervalued, But Its Markets Likely Haven't Bottomed