Topic: How To Invest

What is Pat’s commentary for the week of May 22, 2019

Article Excerpt

Canadian investors got a welcome jolt in the news this past week, with the takeover by Onex (Toronto symbol ONEX) of WestJet Airlines (Toronto symbol WJA). The fact that Onex was ready to pay a 61% premium over WestJet’s price the day before says something about the hidden value that lurks in Canada’s stock market. In our January 2019 Stock Pickers Digest, we declared, “WestJet set to soar.” We said the company’s revenues kept rising due to strong demand for its flights. We pointed out that higher fuel prices have hurt its earnings, as have start-up costs on its new ultra-low-cost carrier, Swoop. Our view was that “WestJet’s strong brand, along with its solid balance sheet, gives it a very positive outlook. As well, WestJet’s international expansion and the launch of Swoop further strengthen its growth prospects.” In making its bid, Onex no doubt noted that the Canadian dollar is now relatively cheap, compared to the U.S. dollar. The two dollars have…

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