Jazz Air Income Fund (JAZ.UN) is one of only two stocks that pass all my criteria for stocks which I am willing to buy and hold for a two month period. Jazz Air Income Fund is a trust created to indirectly acquire and hold limited partnership units of Jazz Air LP. Air Canada Jazz is the second largest airline in Canada based on fleet size and the number of routes operated. Air Canada Jazz operates more flights and flies to more Canadian destinations than any other Canadian carrier. Air Canada Jazz forms an integral part of Air Canada's domestic and trans-border market presence and strategy.
Air Canada Jazz has a commercial agreement with Air Canada that is the core of its business. Under the Capacity Purchase Agreement (CPA), Air Canada currently purchases substantially all of Air Canada Jazz's fleet capacity based on predetermined rates. The CPA provides commercial flexibility, low trip costs and connecting network traffic to Air Canada. Also, the CPA significantly reduces Air Canada Jazz's financial and business risks, and provides a stable foundation for day-to-day operations and future growth.
A review of the insider transactions over the past six months reveals that one of Jazz's directors, Richard McCoy, purchased 10,000 shares on November 13, 2007.
Enervest Income Fund (EIT.UN) is the other stock that passes my criteria. EnerVest Diversified Income Trust is an investment trust which invests in a diversified portfolio of income, royalty and real estate investment trusts, and limited partnerships, all of which trade on the Toronto Stock Exchange. The investment manager of the trust is Cypress Capital Management Ltd.
The RiskGrade of JAZ.UN is 103 and EIT.UN has a RiskGrade of 111.
Should you feel confident that the Canadian market is going to propel higher in the coming two months, you may also want to consider Hanfeng (HF), Mercator Minerals (ML), Petrobank Energy and Resources (PBG), and Red Back Mining (RBI). These four stocks have RiskGrades of 285, 270, 278 and 256 respectively.
A review of insider transactions since July, 2007 indicates that insiders have been net sellers of Red Back Mining and Mercator Minerals. Some Petrobank insiders have been purchasing shares while others have been selling.
Analyst recommendations in the past two months for the six stocks mentioned in this post are as follows:
Hanfeng: Buy (Peter Hodson)
Mercator Minerals: Speculative Speculative Buy - Jennings Capital, Buy - Blackmont Capital, Buy on Weakness (Mark Lackey)
Petrobank Energy and Resources: Buy - UBS, Buy (Hugh Cleland), Hold (David Burrows), Don't Buy (Bill Harris)
Red Back Mining: Buy (Jennings Capital), Buy (Alex Lane), Buy (Bill Harris), Buy (Robert Cohen)
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