GOL Linhas Aereas Inteligentes SA (ADR) (GOL)

GOL Linhas Aereas Inteligenes services the South American market in two segements, with one servicing roughly 60 destinations within Brazil and the other hitting 15 major cities within South America. GOL is essentially a low-cost air company operating in a foreign country, another RYAYY. GOL has been putting on a show over the last few years with impressive revenue growth and unwavering profit growth. Passenger load levels have been steady or slightly increasing and their 2008 forecast looks very promising. Specifically when the company highlighted expectations for 2008, operating margins jumped dramatically from the 4-5% we saw this year to 13-15% in 2008...thats huge!!! With a forward earnings expectations of just over $2 per share in 2009, GOL is trading at just 9 times its earnings which is relatively inexpensive for the low-cost airfare sector (most of which are mired in steep losses right now). This is a perfect time for entry as well with oil spiking over $102 per barrel. When Boone Pickens turns negative on oil, I listen, and low cost airfare will see the biggest boost in their stock price when oil prices do indeed retreat 15% from their highs.

Nero

Sagetrade

Gol is one of my more risky picks. It makes up only 2% of my real portfolio. I like it because it has copied the Southwest model, it is in an emerging market--Brazil, and it's financial reporting is on par with American firms. I'm scared to buy stocks outside the US because of lack of transparency in their financials, but from my research this one seems to be an American run company in a fast growth emerging market. Profits are down because of merger, weak economy, fuel cost, and purchase of more planes but sales are still growing. This will do well long term.

GOL's stock price has taken a hit recently after one of their planes crashed due to air traffic controller error. Adding to the recent decline in the stock price was the drop in 1Q profits which GOL attributes to the delays and flight cancellations caused by the issues associated with the Air Traffic Control System.

Obviously, for the airline industry to get back on track in Brazil, the government needs to step and make something happen. Ask and you shall receive. Recently, the president of Brazil stepped in and met with the aviation heads (since the ATCS is military-controlled) responsible for the ATCS and demanded a deadline be set to fix the problems. As soon as exact date is set, we will probably see the prices of TAM and GOL tick back up as travelers regain confidence, book more flights and we see decreased delays and cancellations in flights.

Also, GOL recently purchased Varig. Varig brings a brand name and additional international routes.

Basically, I'm not sure exactly when this stock will turn up, but I want to own it when it does and I'm hoping that it will be sooner rather than later!

PEG = .68
ROE = 39.99% (approx 2x industry average)

Intrinsic Value (DCF) = $38.47/share

NOTE:

DCF was calculated with:
discount rate = 12%
1-5yr growth = 25%
5-10yr growth = 15%
10yr+ = 5%

I also adjusted the cap ex amount due to an extremely large expense for the previous quarter, which was almost 14 times the average quartly cap ex amount.

If someone can explain that cap ex amount, I'd appreciate it.

Cheap stock... its been a LONG way down... when the economy rebounds its UP UP UP...

Airline operating in Brazil - pullback sitting on nice support at $29 - sell if breaks below $27 - short term target price $38, so risk/reward ratio is acceptable - good entry spot for long term rewards, but would rather see it above the 50 day MA at $34.60 - below the 200 day now with the 500 day at $23, so could be a falling knife this month

GOL is the fastest growing airline companies in Brazil. It utilizes the similar low-cost business model as Southwest. Excluding the rising fuel price, the profit margin has been improved consistently along the years. Currently the stock price has dropped due to the airplane accident. Although it probably would cost the company dearly in the short-term, it won't hurt its fundamentals in the long-term.

This airline carrier is poised for terrific growth in the next few years. Solid business in a market that is just beginning to experience growth among the masses. A discount carrier with little competition and huge demand moving forward.

GOL is the only low-fare airline in Brazil. With a fast growing economy, people will have a need and desire to travel more.

GOL is a low-fare, low-cost airline operator in Brazil, huge market!

This was recommended by a friend from Brazil (Fortaleza). Good prices and good service. Remember, Brazil is comparable to the United States in land mass. It is a long way to travel from major cities like Fortaleza, Sao Paolo, Rio de Janeiro, Brasilia, Goiania, etc. There is a huge market to fill in domestic Brazilian air travel.

Buying on the recent severe dip in this company's stock. While I would almost never consider investing in an airline, this one seems different (copy cat of profitable SW, but in a less competitive and rapidly growing Brazil market).

There is definitely money to be made in the LAM region; however, at the first sign of real political problems in Brazil I will pull the plug, b/c in LAM, you have to make big money in the big times, b/c the bad times really can suck the life out of you.

Buying Varig would bring troubles in a few months

Although counting with a bit of luck, Gol very successfully inserted itself in the Brazilian air travel market in a little tapped niche of low cost flight and not only carved out a very decent slice of market share but alse has contributed to transform the market place, naturrally to its benefit whenever possible. Recent local market challenges should be transpose and growth potential is excelent. Hopefully the company will manage to maintain is low maintenance cost which is the pivot for the profitable low-cost model. If so...definitely a winner.

GOOOOAAAALLLLLLL!!!!

low cost airline in Brazil, will fluctuate but long term trend in Brazil is more people flying vs taking the bus. Good management and good communication with shareholders. Its a growth stock, reasonable valuation and you get a dividend

Great company, does cargo and air transport, and is based in Latin America.

All their elements are in proper place to take advantage of a solid growth pattern for South American air travel as their economy starts to
recover.

Since Varig, the biggest Brazilian airline colapsed, there are two option only to fly, GOL and TAM. You have to consider Brazil is a 180 million people Country and economy is growing.
Still a good buy!

major player in a growing market with increasing market share