With the airline sector largely stagnating in 2018 following nearly a decade of impressive growth, investors wondering if now is the right time to jump aboard a company like Air Canada (TSX:AC) certainly have a lot to consider.
Oil prices are on the rise, and airlines have continued to ride the wave of increased travel in recent years as the global economy has continued to improve – any hint of a travel slowdown, and airline stocks such as Air Canada could certainly come back down to earth.
That being said, the improvement in the fundamentals and cash flow generation of companies such as Air Canada have many investors, including myself, bullish on the long-term prospects of these companies.
Industry consolidation and government protection within Canada have placed Air Canada at a premium market position, though the company continues to trade at a relative discount to its peers, both in Canada and the U.S., in terms of valuation.
I believe that the long-term future for most airlines is going to be one which exhibits "slow and steady" growth and continued improvement from a fundamentals standpoint. As far as value stocks go, Air Canada remains a top pick of mine for long term growth potential relative to the price investors need to pay today for a slice of the action.
For investors considering long term investments with excellent durable competitive advantages and excellent upside, Air Canada is a great place to start.
Invest wisely, my friends.
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