There's little to fault in the operating performance of Copa Holdings (CPA) since my last update,
but the shares haven't moved much since then. There's always a margin
of error in assessing why a stock has performed the way it has; in the
case of Copa, I believe there are still some concerns about slowing
economic growth in multiple Latin American markets, and perhaps some
rotation away toward riskier Brazilian carriers like Azul (AZUL) and Gol (GOL) on an improving outlook/sentiment for domestic Brazilian air travel.
Whatever
the reason(s), I remain bullish on Copa. Management has an excellent,
almost irreplaceable network that can be serviced with a simple
narrowbody fleet, and Copa management has shown an admirable knack for
boosting revenue and controlling/minimizing costs. Macroeconomic risk
goes with the story, but I believe the addition of the 737 MAX next year
will be a positive for the company, and I still think the shares are
undervalued.
Read the full article here:
Copa Holdings Drifting Despite Strong Performance
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