Originally Posted by
tcook052
http://www.theglobeandmail.com/repor...ticle26453590/
The airline sector’s jolting ups and downs give plenty of fodder to its many detractors, and few are more vocal than Warren Buffett. He has dismissed airline investing as “a death trap,” and his own forays into it as “temporary insanity.” Among individual carriers, Air Canada has a particularly discouraging track record. After emerging from bankruptcy in 2004, the airline continued to struggle with high costs, high debt, low returns and huge pension deficit. But the past two years have seen a remarkable turnaround. Air Canada’s share price has climbed more than sixfold. Is this surge still for real? We asked a bull and a bear.
Down 4 percent today. I think AC is doing financial machinations to drive their stock price including insane stock buy backs when they are at record highs. financial engineering is not a lasting solution to building value. And then there is the oil price while YQ has been maintained (or renamed). That's like being in financial crack.
How anyone can call a share price cheap when it's trading (as an airline no less) at 40 PE multiple (after funky exclusions related to aircraft leasing etc) is beyond my comprehension