It's pretty much a given that the Street will take stocks far too low in bad times and far too high in good times, so I can't say I'm surprised Copa Holdings' (NYSE:CPA) shares are up more than a third since my write-up in late December, when I thought the shares looked undervalued but still vulnerable to ongoing weakness in major South American economies.
looks as though 2016 will be the bottom for Copa, but it is hard to
feel a lot of confidence that the economies of Brazil, Colombia, and
Venezuela are going to stage a strong, fast turnaround. That said, the
company has been increasing its exposure to healthier economies like the
U.S., while doing a good job of responsibly managing capacity and
expenses. I still believe Copa can generate over $4 billion in annual
revenue in 2024 and good cash flow, but my fair value hasn't moved
nearly as much as the share price, so I don't see the same opportunity
that I did in December.
Read more here:
Copa's Stock Recovery Has Outpaced The Business Recovery