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Deep Value Stocks

Copa Holdings (CPA)

Luis Ricardo Guizado

Luis Ricardo Guizado

— 2 min read
Copa Holdings (CPA)

Undervalued stock of the month.

Copa Airlines, the hidden Panamanian gem for most foreign investors. This Airlines has over 80+ destinations in over 30 countries within North, Central and South America, as well as the Caribbean. The company’s profitable earnings year after year, its PE Ratio of only 4.95 as of August 2024 and its 7.46% annual dividend makes one hell of a stock. 

Copa Holdings (NYSE: CPA) Second Quarter 2024 financial report has just been released yesterday August 7.

  • The company reported a NET PROFIT of US$120.3 millions and an operating profit of US$159.5 million.
  • The company ended the quarter with approximately US$1.2 BILLION in cash, short-term and long-term investments, which represent 35% of the last twelve months' revenues.
  • Copa Airlines had an on-time performance for the quarter of 87.6% and a flight completion factor of 99.7%, once again positioning itself among the very best in the industry.
  • Fleet currently consists of 109 aircraft – 67 Boeing 737-800s, 32 Boeing 737 MAX 9s, 9 Boeing 737-700s, and 1 Boeing 737-800 freighter. According to Planespotters.net, the average age of Copa Airlines fleet is 9.5 years.

In terms of safety, Copa has consistently maintained a great record. AirlineRatings.com gave Copa Airlines a score of seven out of seven stars for safety and has been recognized by CIRIUM as "The Most Punctual Airline in Latin America" in 2023, obtaining a punctuality rate of 89.46% in on-time arrivals and a schedule completion factor index (flights not canceled) of 99.8%, both indicating the highest in the Americas and No. 3 and 2 in the world, respectively.

In terms of price action, the stock hit its all time high back in 2013. Since then price had been in a bearish cycle and it has just turned bullish in 2023 when we had a bullish market structure break signaling BULLS ARE BACK. In the 3 month chart, RSI has just turned bullish back above 50 level. From a macro perspective we could have a retrace towards $60’s and this will be the IDEAL MACRO LONG ENTRY but for now price is holding quite well. 

The $80 price level must act as support. If price sweeps below, then $60-70’s might be on its way. Short term it looks like the selling pressure is over. The monthly chart is currently printing a perfect bullish hammer candle. Any retrace toward $84 is a buy, $95 price target at first is on its way. Price must then flip $95 as support to then target the highs of $121 and if we get those highs in, bye bye my love bullish cycle re-confirmed. 

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