Michael Simpson, CFACargojet IncCJT.TOPAST TOP PICKMay 04, 2016

It has good forward guidance with 25% earnings growth predicted. It is technically a little overbought so it may pull back $10 to $15.

Would not invest in company right now. Good company, but very capital intensive & if there is economic slowdown - will not be good for business. Does not own shares. Better options for investors in the markets. 

Come off since Covid, but has now had a nice pop. Founder is well respected. Relies on freight and deliveries. In a potentially slowing economy, less volume demand. A recession would definitely impact it, similar to a FDX.

Chart indicating strength. Nice break in down trend. Good business to hold. Would advise picking a stock price target to sell or buy. 

CargoJet boasts a cheaper valuation and has a decent growth profile. Shares have plunged a lot this year.

There is little or no risk with solid long-term contracts with large companies like Amazon. It is managing costs well but volumes are weaker. It has good management along with good margins. It trades at 7X EBITDA which is the best price in a long time. He sold it as a tax loss but plans to buy back later in the year.

He likes it and there is an opportunity to start buying it with the pullback. A sustained high energy valuation could be a headwind.

He turns-over stocks 3-6 months. CJT has been in a downtrend since its 2021 peak and doesn't see a change in that. He's waiting for a base, and a base is the time to buy.

Out of favour right now, lumped in with slowing e-commerce. Monopoly for overnight air cargo delivery. Long-term contracts, and they get paid even if volumes are low. Very good EBITDA margins. At some point it will stabilize, better days ahead. Good time to start buying.

Fundamentals strong on business despite weak share price.
Good time to invest given low price.
Would be a buy and hold type of investment.
Expecting share price increases going forward.
$100-$110 price target. 

Valuation low due to recession fears.
Good time to buy.
Company executing well.
Strong management.

Terrific company. Will be around for the long haul, and will find a profitable niche. Hard to know how competitive the space will get. When passenger flights aren't full, they pick up cargo capacity, which steals CJT's lunch. He's waiting for an entry point to re-enter.

Cargojet did well over the pandemic and generally is doing better than the industry. It is now at 20 X earnings down from 30 X before. However it is facing some headwinds since the passenger airlines are recovering and they carry a lot of cargo as well as passengers,.

Short vs. long really matters to a company like this. Economic and e-commerce slowdowns really affect it. Not filling planes, so revenue is hurt. Excellent time to add a high quality company. Monopoly in Canada. Adding new routes. Planes are expensive. Short-term bumpy, long term you'll be just fine.

(A Top Pick May 10/22, Down 29%)

It has pulled back along with its international expansion plans. Cargo capacity has increased worldwide so there is too much supply. However it has a near monopoly on overnight cargo in Canada. He may add more.