Last Updated On: October 12, 2018
Share Price On This Date: $18.14
Canada's second largest airline.
Westjet has big ambitions. They have launched a new, ultra low cost carrier this year and have been expanding their international flights. They have a long history of profitable growth and strong execution behind them and hopefully this past success will translate into future results as they move into the next phase of their growth. Shorter term, though, they are going through some fairly severe growing pains. They have taken on a bit more debt than I like to see to fuel their expansion plans and this, along with the recent spike in the price of oil and a growing list of competitive threats from other low cost carriers has put a serious crimp on their profitability. The company lost money in the second quarter of this year for the first time in well over a decade. This has knocked the stuffing out of the stock price and WestJet shares are now trading at a price of only 5 times their peak earnings of a few years ago. A belief in their ability to work through their growing pains and emerge stronger on the other side could pay off handsomely if in fact they do manage to turn their operations around.