Stock Watch - Stock Picks - Jetblue Airways and CMH
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Jean Pierre Verster from Fairtree Capital chose Jetblue Airways Corporation as his stock pick of the day and Drikus Combrink from Capicraft chose Combined Motor Holdings Ltd.
Verster said: "I'm choosing a global company as per usual, and Jetblue Airways is roughly the sixth largest US airline. It's a low cost airline and they recently announced that they are going to start flying to London. This will allow a lot more passengers to buy Jetblue tickets because of the new London route. They also have very modern fleets with a few new Airbus A321neos, and this strategic choice that they made worked out quite well in relation to companies that chose the Boeing 737max. Also if you look at their margins it's lower than their competitors which means that there is an opportunity to get to the same type of efficiencies and increase those margins. They came out with their results in the last few days and their share price actually rose today notwithstanding a higher oil price which we would normally associate with lower share price for an airline because of the cost of oil."
Combrink said: "I choose Combined Motor Holdings a retailer that sell cars and I think they are well positioned with the locations that the operate in. I think the management team have done great allocations of capital, and overall they have done great in the recessionary environment. They've continued to manage costs in this environment knowing that we are in a difficulty environment. They've paid down a lot of debt and it's sitting at a 7 price earnings ratio. I think CMH is actually much shrewder operator and then their peers out there"
Verster said: "I'm choosing a global company as per usual, and Jetblue Airways is roughly the sixth largest US airline. It's a low cost airline and they recently announced that they are going to start flying to London. This will allow a lot more passengers to buy Jetblue tickets because of the new London route. They also have very modern fleets with a few new Airbus A321neos, and this strategic choice that they made worked out quite well in relation to companies that chose the Boeing 737max. Also if you look at their margins it's lower than their competitors which means that there is an opportunity to get to the same type of efficiencies and increase those margins. They came out with their results in the last few days and their share price actually rose today notwithstanding a higher oil price which we would normally associate with lower share price for an airline because of the cost of oil."
Combrink said: "I choose Combined Motor Holdings a retailer that sell cars and I think they are well positioned with the locations that the operate in. I think the management team have done great allocations of capital, and overall they have done great in the recessionary environment. They've continued to manage costs in this environment knowing that we are in a difficulty environment. They've paid down a lot of debt and it's sitting at a 7 price earnings ratio. I think CMH is actually much shrewder operator and then their peers out there"