Quick note -- GOL and LFL
Just a quick note because I haven't seen this information out on the web yet -- Gol Linhas Aereas Inteligentes (GOL -- click to register for free RT streaming quote) was downgraded today to neutral by Merrill Lynch on valuation, at the same time that they upgraded LAN Airlines (LFL -- click to register for free RT streaming quote). LAN Airlines is another big regional flier in South America, based in Chile. I haven't looked into them in detail, but they're trading at a trailing PE of about 75 versus GOL's trailing PE of 25 ... hard to make a straight valuation argument there. LFL is also not a low-cost carrier, and regardless of how successful LFL is in it's international markets and how well it's managed, I think the future of air travel in South America will probably be the same as that here in North America -- the lowest cost provider who can expand the market will be the one who will win.
I'm watching the price on GOL very carefully today -- I hadn't intended to buy anything until I complete my annual checkup of all of my holdings, which is taking longer than expected, but this might become an excellent opportunity to buy a market leader who might grow at 50% over the coming year at a lower price.
I'm watching the price on GOL very carefully today -- I hadn't intended to buy anything until I complete my annual checkup of all of my holdings, which is taking longer than expected, but this might become an excellent opportunity to buy a market leader who might grow at 50% over the coming year at a lower price.
This article posted by One Guy @ 1/03/2006 11:11:00 AM 0 comments
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