Some attractive price points

24 Jun 2020

It seems like volatility is starting to enter the market again and people are starting to be fearful again. What will likely happen is during waking hours the market will drop while overnight feds will pump causing a lot of chop in the overall market. Meanwhile certain sectors will continue to get hammered while that occurs namely the airline sector.
I like this company because its not just invlved in training in civil aviation, but also involved in defense and security as well as healthcare education. Now I find it unlikely that AC will go bankrupt, but given the enviroments I can see how CAE will stand a better chance of surviving given that education is unlikely to die. While less pilots being employed likely means less pilots being trained and thus revenue there are many different streams of revenue that is not just limited to training commercial pilots. And if things ever get back on line I'm sure a lot of those pilots may need to be trained again. The entry points is just me being greedy but if things start getting uggly in the next couple weeks we may visit those gaps. where it will prove to be great entry point while people are in fear.

25 Jun 2020

Catatan

Here is a redo of the write up . I should really proof read my stuff haha.

cae.com/
It seems like volatility is starting to enter the market again and people are starting to be fearful again. What will likely happen is during waking hours the market will drop while overnight feds will pump causing a lot of chop in the overall market. Meanwhile certain sectors will continue to get hammered ,one of them likely being the airline sector.

I'm interested in CAE because its not just involved in training in civil aviation, but also involved in defense and security as well as healthcare education with facilities all over the world. Now I find it unlikely that particular airlines will go bankrupt, but given the environments I can see how CAE will stand a better chance of surviving given that education less likely to die. While less commercial pilots employed likely means less pilots being trained and thus revenue there are many different streams of revenue that is not just limited to training commercial pilots. And if things ever get back on line I'm sure a lot of those pilots may need to be trained again.
Comparison

without comparison

CAE is currently correlated well with airlines, but I believe it will begin to decouple in the future. Let's consider some scenarios.
1)What if things get back to normal(unlikely)? Both airlines and CAE will likely do well, but what if there is a second wave and we extend restrictions?
2) What if there is increased global tension with more militarization? In these scenarios CAE should in theory do better than airlines .
3)What if with social distancing airlines need to fly more planes? It will be more costly to airlines ,but if anything CAE will stand to benefit as pilots would need to be trained.

From an investment point of view I prefer this play over airlines and if the market starts getting ugly I will be looking at the price points as highlighted by the boxes as I believe those gaps will be visited. Of course I'd be using my TA and see how things are when the gaps get filled, but this is something that should be in your watch list. Considering the multiple narratives this has more potential than airlines.

If you think this is short sighted please talk me out of it :)