The Motley Fool

Why Investors Are Done With Air Canada Stock, But You Shouldn’t Be

Plane on runway, aircraft
Image source: Getty Images.

Air Canada (TSX:AC) has been the bane of the investor’s existence since the pandemic — actually, even before that. Air Canada stock soared in share price before crashing down. So, even before the pandemic, Motley Fool investors stressed over when they should buy the stock.

The problem hasn’t changed, but the situation sure has. And, frankly, it looks like investors are sick of waiting.

Enough is enough

While Air Canada stock continues to make little announcements here or there, adding a new destination, discussing new health and safety measures, it hasn’t been enough. The company continues to trade around $25 per share.

Air Canada stock has been stuck around $25 per share since November 2020. That’s almost an entire year at one share price! So, it’s no wonder that investors seem to be done with the stock. And that likely continues to be because of the COVID-19 variants.

While the vaccine has become widely accessible in many countries, including Canada, there has been a stall as of late. And until we have herd immunity, it is highly unlikely Air Canada stock will get anywhere close to normalcy.

Should you give up?

Definitely not.

There’s the old saying from Warren Buffett that should come to mind, to “be greedy when others are fearful and fearful when others are greedy.” Some investors have changed focus over to meme stocks, hoping to make millions. While they still watch Air Canada stock for signs of life, they’ve mainly given up on the stock performing well.

And that’s what makes now such a great time to buy — at least if you’re a long-term Motley Fool investor.

The key is that the pandemic will not last forever, even though it feels that way. I remember reading at the beginning of the pandemic that some economists and scientists believed it wouldn’t be until 2024 that we’ll see a full end to the pandemic. At the time, I thought that was ridiculous. Now? Not so much.

How long will you have to wait?

Don’t get me wrong; that’s a long time to wait. And it’s likely you won’t have to wait another three years to see movement from Air Canada stock. It’s just not likely to be the $50 share price by the end of the year, as the variants continue to sweep the world.

But eventually, the pandemic will come to an end. You will have used this time as an opportunity to buy up the stock. And the company is already improving! Cash burn is lower. Destinations are increasing. Air Canada stock has also discovered further revenue streams to take on that are unlikely to sit at the sidelines after the pandemic.

Bottom line

Whereas other companies will struggle to rebound in the pandemic, eventually people need to travel. Whether it’s for business or seeing family they haven’t seen in the years, or simply a vacation after being home. It’s going to happen. And Air Canada stock continues to hold the majority of air travel in Canada.

And, most importantly, the company has been here before. It came back from under $1 per share to above $50 before crashing. It’s very likely it will get there again someday, and right now, it’s only down by half that price. So, the patient Motley Fool investor could see a major recovery in the years to come for a steal of a share price.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of AIR CANADA. The Motley Fool has no position in any of the stocks mentioned.

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