Of all North American airline stocks, Air Canada (TSX:AC) still remains my favorite pick for long-term investors today. Despite a rather abrupt share price decline in recent months following an unforeseen Coronavirus pandemic, Air Canada's fundamentals and balance sheet generally are superior to its peers. The airline certainly has a lot going for it, but I still think Air Canada is a stock which should be on investors’ watch lists rather than buy lists. Here's why.
The airline sector itself is in shambles, and I think this time around, things may actually be different. The amount of structural damage that has been done as a result of the coronavirus remains to be seen. However, we've already seen some significant changes to how commuter travel may be affected post-pandemic.
With virtual meetings now generally becoming the norm, I expect discretionary business travel to be cut down dramatically in the future, particularly as companies look to trim costs in a recession. More vacations may take place via road trip, camping and other recreational activities, in the place of long-haul destination vacations, at least for awhile.
Predicting exactly when "peak travel" will return is a difficult task, so staying on the sidelines right now is a move I think makes a lot of sense. Now is the time to build a list of stocks to watch and wait for stock prices to become attractive enough to pull the trigger.
Invest wisely, my friends.
