AC shares trading at a 4 month low

[rudder]

Reasons?

[FA@AC]

Fuel price concerns?

[rudder]

Fuel price concerns?

WJ share price is not suffering. Quite the opposite as a matter of fact. Could it be other issues that are more local in nature? Are there any war drums being beaten about upcoming collective bargaining? What about ongoing pension funding issues? Even though the past service funding moratorium arrangement is still in place, funding recovery looks a little less likely than forecast due to ongoing depressed interest rates.

I know that analysts are saying 'buy' because they believe that the stock is undervalued. But the market disagrees and the market is seldom wrong.

[Specs]

Aren't there some labour contracts up for renewal at the end of March?

[Mitch Cronin]

But the market disagrees and the market is seldom wrong.

That's a load of hooey. So a stock never goes down and then up again eh?

...in any case, I wouldn't be surprised to learn the low is because some big players have been unloading shares before the contract negotiations stir up some scare.

[Lakelad]

.

Article containing number of analysts' opinions:

WestJet shares appear ready for takeoff

January 19, 2011 - Globe and Mail

Brent Jang - Transportation Reporter

Last updated January 24, 2011

Air Canada has been a surprising star on the stock market over the past 21 months, but the momentum is starting to shift in WestJet Airlines Ltd's favour.

WestJet shares climbed a mere 14 per cent last year while Air Canada stock soared 161 per cent. Now, several analysts are examining whether it's time to switch investing strategies and back WestJet.

UBS Securities Canada Inc. analyst Tasneem Azim said the window of opportunity appears to be closing for huge investment gains on Air Canada, whose shares declined 13 cents to $3.13 on Wednesday.

Timing, of course, is everything when it comes to investing in airline shares. From its IPO price of $21 in late 2006, Air Canada got beaten down to a penny stock in the spring of 2009, when it traded as low as 73 cents. Air Canada shares finally staged a prolonged rally after management secured labour and pension deals with unions in the summer of 2009.

But the Canadian Auto Workers union, which represents airport customer service agents and call centre staff, has a collective agreement that will expire on Feb. 28. Four other Canadian union contracts will expire March 31.

"We believe labour contract negotiations could lead to a material increase in wage and pension expense over the next few years for Air Canada,"

.

[rudder]

That's a load of hooey. So a stock never goes down and then up again eh?

...in any case, I wouldn't be surprised to learn the low is because some big players have been unloading shares before the contract negotiations stir up some scare.

The market devalues a stock based on risk. As AC skirted a second trip to CCAA, the stock price was reduced close to nil. Once CR began to chalk up victories to enhance AC liquidity the price recovered. Last year there was a whif of optimism in the industry as most believed that economic recovery would benefit the airline sector. And now, some of that optimism has been rescinded, particularly in the case of the AC stock.

[CanadaEH]

That's a load of hooey. So a stock never goes down and then up again eh?

...in any case, I wouldn't be surprised to learn the low is because some big players have been unloading shares before the contract negotiations stir up some scare.

Wonder if your union is still holding onto their shares that they were given 18 or so months ago?

[CanadaEH]

The market devalues a stock based on risk. As AC skirted a second trip to CCAA, the stock price was reduced close to nil. Once CR began to chalk up victories to enhance AC liquidity the price recovered. Last year there was a whif of optimism in the industry as most believed that economic recovery would benefit the airline sector. And now, some of that optimism has been rescinded, particularly in the case of the AC stock.

I think it has more to do with the upcoming contact negotiations and the cost of AC restarting payments into its pension fund. WJA initiating a dividend may play a very small part as well. I dunno.

[Guest]

Aren't there some labour contracts up for renewal at the end of March?

All of them do!

[13820]

The Financial Post had an article lately saying profits at AC may have peaked. By Scott Deveau. It had a very negative WJA slant but did say that AC was peaking and then mentioned the upcoming negots too.