Stephanie Bedard-Chateauneuf: Air Canada Air Canada (TSX:AC), Canada’s largest domestic and international airline, is my top stock for June.
Air Canada is one of the best performing stocks of the TSX so far this year, with a return exceeding 55%.
The airline reported a very good first quarter despite the continued grounding of its fleet of Boeing (NYSE:BA) 737 Max aircraft. Results were boosted by an increased number of passengers and the recent acquisition of the Aeroplan loyalty program.
Air Canada earned an adjusted profit of $17 million or $0.06 per share in the quarter compared with an adjusted loss of $26 million or $0.10 per share a year ago.
Operating revenue rose to a first-quarter record of $4.45 billion compared with $4.07 billion in the same quarter a year earlier.
Analysts from Thomson Reuters had expected on average an adjusted loss of $0.18 per share and revenue of nearly $4.39 billion for the quarter.
What also helped to fuel the share price is a news that came out a few days ago stating that Air Canada is in exclusive negotiations to buy the company that owns Air Transat for about $520 million.
Earnings are expected to grow by 19% on average annually for the next five years. The stock’s five-year PEG is only 0.55, so Air Canada is very cheap relative to its high growth prospects.
Fool contributor Stephanie Bedard-Chateauneuf owns shares of Air Canada.
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