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During the past week, Chorus Aviation Inc. announced its first quarter earnings for 2014. Some of the highlights are as follows (www.newswire.ca) .
- EBITDA of $47.3 million, up 8.2 %
- EBITDA margin of 11.4%
- Operating income of $31.2 million, up 50.0%
- Adjusted net income of $20.3 million, up to 38.0%
- Adjusted net income per share of $0.17 per basic share.
- $60.0 million early, partial repayment of 9.5 % maturing convertible debentures.
Chorus Aviation Inc also announced that they will be changing their dividend from a quarterly dividend to a monthly dividend in the 3rd quarter of 2014.
The first-quarter net income is down from a year ago by 39.1 %.
Chorus Aviation Inc (The parent company of Jazz Air) has one major customer and that is Air Canada. By law, Air Canada has to fly to areas even if it is not profitable. Usually these smaller airports are serviced by Air Canada Jazz as their planes are smaller.
I have decided to sell my shares in Chorus Aviation last week as I believe my entry point at $3.68, which you can read about here, is higher than I would like. Airlines have to deal with rising fuel costs and inflation causing their customers to reduce their travel. The sale of 1000 shares happened over two days so I had to pay commissions for each day.
Cost of Shares including commissions : $3689.95
Proceeds of Sale including commissions: $3800.00
Net Profit : $110.05
Return of Investment: Net Profit / $3680.00 = 2.99%
The sell order for my shares was a limit order for all 1000 shares at once. Since the complete sale happened over 2 days my commission for selling was $10.00 instead of $9.95. My broker has $0.01 per share cost with a minimum $4.95 commission and max $9.95 commission. The order went through as 500 shares being sold on each day so I paid $5.00 commission each day.
I will update my portfolio tab spread sheet in early June.
DISCLAIMER:
I think that was the right move. Airline stocks tend to do well in the fall and winter, but not so much in the summer. Chorus pays a nice dividend though, but I wonder if it's sustainable long term.
ReplyDeleteLiquid,
DeleteRichard Branson says "The easiest way to become a millionaire is to be a billionaire and start an airline". The dividend is good in terms of yield but it is that high for a reason. If there was a recession the airlines would suffer big time. That factored into my reasoning for selling along with the fact I own another high yielding stock in Just Energy. Air Canada was the best performing stock on the TSX in 2013, which is surprising.