Air Canada Weighs Down Jazz Air Fund - Versant Analyst

Includes: ACDVF, JAARF
by: FP Trading Desk

Jazz Air Income Fund (OTC:JAARF) was getting roughed up on Monday, falling 5% through mid afternoon in Toronto.

To be sure, the fall in the stock, is part of the larger sell off that is taking place on North American markets Monday, including the 700 plus point drop in the S&P/TSX Composite through 2 p.m.

Versant Partners analyst Cameron Doerkson thinks it may also have something to do with its tight relationship with Air Canada (AIDIF.PK).

Mr. Doerkson wrote in a note to clients:

While Jazz’s financial position remains secure and we believe that the distribution remains safe, at least in the near-term, we suspect that the perceived liquidity issues for Air Canada will continue to weigh on the unit price.

Jazz shares have fallen more than 62% from C$8.21 in February to C$3.06 on Nov. 20. Mr. Doerkson lowered his price target from C$5.50 to C$4 and lowered his "buy" recommendation to "neutral."