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With ACE Aviation Holdings Inc. (OTC:ACEAF) trading at around cash value, the stock appears to have presented a buying opportunity for investors, according to Canaccord Adams analyst Tom Veresh.

In a note to clients Tuesday, Mr. Varesh says the wind-up of ACE “has dragged on far longer than we had initially anticipated.” But regardless of whether the wind up happens in the short-term – “which we believe it will” - the recent lows that the stock has hit appears to make the shares a buy. The shares, which were trading below C$5 on Friday, closed Tuesday at C$6.15.

In the past year, ACE has sold off all of its interests in frequent-flyer program Groupe Aeroplan and Jazz Air LP, Air Canada's (AIDIF.PK) regional affiliate. Its remaining holdings are a 75% stake in Air Canada, totaling 75 million shares, and a 28% stake in aircraft maintenance provider ACTS.

Mr. Varesh is maintaining his speculative buy recommendation on ACE stock, but lowering his 12-month target price to C$15.50 from C$25.

Given the current valuation of Air Canada, general market conditions and the lack of clarity as to when and how ACE will wind up,  Mr. Varesh says the new target price is a reflection of his Net Asset Value calculation, as well as current market prices for Air Canada, ACTS as well as cash and debt on hand and the potential tax impact of the wind up.

As for the timing of the wind up, while Mr. Varesh says he believes it will probably be completed by year’s end, it may stretch into 2009.

Source: ACE Aviation Shares Trade Near Cash Value