AIRLINE company Cebu Pacific Inc. (CEB) ended last week in the red as its stock price shrunk by 2.50 percent or from P41.95 to P40.90 as of last Friday, July 15, 2022.
However, CEB's stock rates as a good short-term investment because of easing fuel prices, according to Philstocks research associate Claire Alviar.
She added that CEB shares are nearing the oversold level. When a stock is oversold, it can be considered a bargain.
"Chart-wise, using the 14-day RSI (relative strength index), it is not yet oversold but it is near that level," Alviar said.
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Over a 52-week period, CEB's highest closing price was P49.75 on Nov. 9, 2021 and its lowest was P38.90 on the dates of Sept. 29 and 30, 2021. Its net income and losses over the past three years were as follows: P9.12 billion in profit in 2019; P22.24 billion in losses in 2020; and P 24.90 billion in losses in 2021.
Alviar also notes that for now, with the current value of oil prices in the world market, stock traders may trade CEB with a support level of P39 to P40 while the resistance is pegged at P48.
According to the Philippine Stock Exchange directory, CEB was incorporated on Aug. 26, 1988 as an airline company that operates under the trade name Cebu Pacific Air. It also pioneered the "low fare, great value" strategy in the local aviation industry, and in 2005 adopted the low-cost carrier business model.
The company was granted a 40-year legislative franchise to operate international and domestic air transport services in 1991. Cebu Pacific commenced its scheduled passenger operations in 1996 with its first domestic flight from Manila to Cebu, and international operations began in 2001 with flights from Manila to Hong Kong.
As of Dec. 31, 2021, it operates a route network consisting of 55 domestic routes and 14 international routes with a total of 1,229 scheduled weekly flights. The company operates from seven hubs, including the Ninoy Aquino International Airport Terminals 3 and 4 in Pasay City; Mactan-Cebu International Airport in Lapu-Lapu City; Diosdado Macapagal International Airport in Clark, Pampanga; Davao International Airport in Davao City; Iloilo International Airport in Iloilo City; Kalibo International Airport in Kalibo, Aklan; and Laguindingan Airport in Misamis Oriental.