Ian Macqueen of Bancroft Capital who authored an extensive report covering various GlobalX growth scenarios and fair value per share, recently sat down with Grant Howard, President of The Howard Group to discuss the analysis in detail.
Looking at per plane economics, fleet growth over and above 8 passenger aircraft at the end of 2022 and a mix of passenger and cargo aircraft through 2024, he calculated a future per share fair value of Base Case: $1.43 US / $1.94 CN Upside Case: $5.13 US / $6.93 CN.
The upside case fair values are six times the current share price.
The discussion is in two parts.
- You (Ian Macqueen) are a GlobalX shareholder but you began buying the stock in early 2021. Why?
- Your “for informational purposes only” report covered a lot of territory and different GlobalX growth scenarios. Explain the challenges in forecasting fleet growth through 2024.
- In your report you noted how the business model mitigates a lot of risk. Explain, and do you think most people understand the model or go, “it’s just another airline”.
- You wrote that the market is “myopically focused on near-term challenges” and to quote: “With some good news on aircraft deliveries and a resolution on the financing uncertainty, we believe GlobalX management will finally see some of the credit it deserves via share price appreciation.” Please explain those points a bit more.
- Although GlobalX stock has had its moments where the stock has performed very well, do you think that in addition to the points you raised there’s more at play such as the importance of getting a major U.S. investment firm to step up and support, not only the need for growth capital, but the market.
- You calculated a Base Case and Upside Case “Fair Value” for 2023 and 2024 with the upside being just over $5 US and just under $7 CN, which represents about a six times return from the current stock price. Presuming GlobalX can grow its fleet to 18 passenger and 12 cargo by the end of 2024, when do you presume the stock could hit your “fair value” numbers?
- You dove deep into Peer Group comparisons to produce “fair value” numbers for GlobalX. Just two of those companies for example being Sun Country, which two years ago was $43 per share and went down to $18 and Cargo Jet, which was at $250 and is treading water just over $100, reflect what’s happened with sector valuations. How much of what is happening in the sector impacts GlobalX when it comes to market valuation?
- Do you think there is an end game for GlobalX such as get to the “right size” and be acquired or more likely just keep growing and growing into a, pun intended, global brand?
Ian Macqueen has over twenty years of varied capital markets experience. He currently runs a consultancy service assisting clients with corporate planning and investor relations. Originally a Professional Geologist by training, Mr. Macqueen worked as an equity analyst focusing on the energy sector for a number of different banks between 2005 and 2020. Prior to that, he spent five years evaluating and marketing oil and gas assets.
Ian Macqueen’s report was commissioned by Global Crossing Airlines Group Inc. (GlobalX) and prepared and issued by Bancroft Capital Corp. in consideration of a fee payable by GlobalX. The report was published for informational purposes only.
To read the entire report, please click HERE.