Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Ugliness In Venezuela Creating An Opportunity With Copa Holdings

There are exceptions to every rule, including the generally sound advice to steer well clear of airline stocks. Alaska Air Group (NYSE:ALK) has done well for investors by focusing on the disciplined operation of regional routes, and Copa Holdings (NYSE:CPA) has followed a broadly similar strategy in across North, Central, and South America.

Investors expect certain risks with airline stocks, namely volatile fuel prices and revenue uncertainty stemming from often irrational competition and the macroeconomic client. The ongoing mismanagement of Venezuela has created another significant risk for Copa, as devaluation imperils the company's significant cash holdings in the country and an escalating spat with the government of Panama could threaten even more.

No airline is a...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details