IBD 50 stock Copa (CPA) is in a buy zone with a buy point of 89.27. Shares executed a breakaway gap on Jan. 13. Strong volume accompanied the price action for this growth stock. Copa’s low-cost carrier Wingo has been expanding to more domestic and international destinations since 2016.
CPA stock is hovering 3% above the entry. The depth of the cup is slightly more than ideal, at 43%.
Shares rebounded from their 50-day moving average as they carved out the right side of the cup base. The stock is building a handle on lighter volume, with an ideal depth of 10%.
Robust Technical and Fundamental Ratings Boost Growth Stock
Copa has a perfect Composite Rating of 99 and a Relative Strength Rating of 92.
Third quarter sales of $809.5 million grew 82% from the previous year while earnings of $2.91 per share marked a whopping 316% growth spurt, according to Market Smith chart analysis. The company turned around a year ago after delivering a string of negative earnings. Fourth quarter earnings are due on Feb. 15.
Copa is a Latin American airline operator of passenger and cargo aircrafts, with two divisions: Copa Airlines and Copa Columbia.
The company operates 91 aircrafts across 295 daily flights to 76 cities and 32 countries in the Americas and Caribbean. Its Panama City hub assists the carrier’s high completion goals, with ideal weather and central location across the American continents. Panama City’s Tocumen International Airport has been called “The Hub of the Americas”, ideally situated between North and South America.
This geographical placement allowed the company to report impressive load factors of 84.1% in December and 85.1% for the fiscal year. A load factor is the percentage of seats that are booked, compared to total availability.
The growth stock holds first place in the Transportation-Airline group, which ranks 49th among IBD’s 197 industry groups.
Low Cost Carrier Wingo
Copa also runs low-cost flights through its subsidiary Wingo.
Wingo was the first low-cost carrier owned by a full-service airline in Latin America, taking over unprofitable routes from Copa Columbia in 2016. Wingo operates out of El Dorado International Airport in Bogota and has added routes since it first launched. Most recently, it expanded domestic routes and added flights to Mexico.
In July last year, Wingo got the go-ahead to operate flights to Argentina. Domestic flights include destinations like Santa Marta and Medellin. while international destinations include Cancun, Quito, Aruba, Costa Rica, Ecuador, San Jose and Havana.
The growth stock has also partnered with United Airlines (UAL) for marketing and code-sharing. This allows Copa to book seats on United flights, and vice versa. In addition, some Copa tickets are eligible for awards through United’s MileagePlus membership.
Mutual funds own 52% of the growth stock. Exchange traded funds also own CPA, including the Invesco Dynamic Leisure and Entertainment ETF (PEJ) and Advisor Shares Dorsey Wright ADR ETF (AADR). (https://www.investors.com/research/growth-stock-latin-american-copa-offers-jet-blue-like-low-cost-travel-partners-with-united/)