www.appliedproductivity.com
This is a look at three airline stocks-Air Canada,Chorus Aviation,and WestJet.Air Canada has gone from about $2 per share in August to above $5 in October.A dramatic rise that is probably related to their $3 billion refinancing that dramatically increased their assets but gave them negative shareholder equity of $3.34 billion.On the other hand,they have had continually increasing traffic and load factors over 2013.According to stockbroker's reports their earnings per share was $.65 per share with a P/E ratio of 7.97 and Ebitda of $124 million.
Secondly we have Chorus Aviation which has seen a slight increase in traffic and has somewhat restructured their business.They have a maintenance facility in Halifax and have put some recent improvements in it as they also closed down their London facility.This, in order, to make Halifax a first class facility.Chorus has investments in Uruguay and previously in Thomas Cook Charters.Thomas Cook ended it's relationship this year.It is too early to tell whether they will increase their investment in Uruguay and if it will be profitable.
Chorus, according to stockbrokers has earnings per share of $1.54 and a P/E ratio of 4.87 and an Ebitda of $117 million.
Chorus has gone through an autopsy of it's agreement with Air Canada it's biggest customer and there should be no major changes in it for awhile.There did not seem to be any major changes to the agreement but Chorus has dropped in price since the revision process.Can Air Canada still have strings to pull on this agreement?It is possible.Chorus' assets are much less than Air Canada but so is it's debt.It has shareholder's equity of only about $150 million.
WestJet has climbed from about $20 in the summer to it's present $25 a share.According to stockbroker's reports it's earnings per share is $1.99 per share and P/E ratio of 12.76 and Ebitda of $341 million.WestJet has higher load factors recently while increasing it's capacity.Revenue should increase in the season near Christmas.
Third quarter earnings will be out soon for all three stocks and it is likely that Chorus and WestJet earnings will increase slightly and Air Canada will likely show an increase in revenue and a healthy drop in earnings if it's debt costs come into play in this quarter.WestJet looks like the winner followed by Chorus.How closely Chorus follows will depend on their investments and the profitability of their Halifax operations.
When Mike Harris was premier he brought in "The Common Sense Revolution".It brought with it government cutbacks and layoffs.But Mike did cut back on government spending as he promised.However there was a backlash from the "revolution".The Liberals got in with big numbers and this brought us Dalton Mcguinty and new increases in government spending.Dalton brought in the P.S.T to match the federal government's G.S.T The economy of the province at that time was about $650 billion or slightly bigger.Almost as big as Finland.Denmark,Norway and Sweden combined. So a 8% tax would bring in about $50 billion new tax dollars for the government.In addition, Mcguinty ran deficits,at first small ones and then as big as $21 billion.There were government programs for everything.Mcguinty even had a program to pay people to harass others that he disagreed with but did not break any laws.This was his government harassment program and it was popular.
Our new premier continues in his tradition.She has money for traffic lights in the middle of highways and money to start new subdivisions in towns like Wasaga Beach and Collingwood.The government will put in new roads and new sewers and new water lines if you will build and then they have money to help you to build.But they have no money for new jobs.Both of those towns ,for example ,have few new jobs.Midland for example could use a new wing on their hospital for special care like Newmarket has.The government should be lowering education costs so young people have all the skills needed to get new jobs.But mostly our premier needs to reduce the P.S.T so people can afford to live in this province.All of these things will help to create new jobs.
