Categorized | Stock Tips

Cebu Pacific – Sell or Hold?





I have shares in CEB (Cebu Pacific) and now I am thinking whether to SELL my shares or just HOLD.

Reason for Selling:
1. With SMC buying PAL/Airphil Express, in a few years Airphil may overtake Cebu Pacific specially now that Iñigo Zobel has been elected president of Airphil Express. Read If you have the money, would you buy PAL?

2. Although Cebu Pacific is still a solid company, there are many stories about bad customer service, delayed/cancelled flights and negative experiences that cannot be ignored, most specially what happened to the case of Raymart Santiago/Claudine Barretto (unrelated to the airport brawl with Mon Tulfo) where the passengers where not informed before leaving that their luggage was shipped to another flight, for me it was non-acceptable, if they have informed the passengers before the flight, they might have understood then.

Read also Buy CEB, which I posted last year.

CEB Target Price is more than P100 by all analysts (But this was in 2011), it is currently trading at around P70/share, even if we lower the target price to P85-90, Cebu Pacific may still be a good investment in the next 6 to 12 months.

About Iñigo Zobelhttp://en.wikipilipinas.org/index.php?title=Inigo_Zobel

Do you think I should sell my CEB shares?

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2 Responses to “Cebu Pacific – Sell or Hold?”

  1. Jillsabs says:

    Thinking of the same thing myself. I used to work for CebPac so I still have a residual loyalty for the company, but even then I already witnessed how customer service suffered because of the many efforts to cut costs.

    I think I’ll stop buying more CebPac stocks and just hold on to what I already have. MEG’s going great though, I was up 7.5% the last time I checked :)

  2. Charles says:

    Same thoughts here…CEB grew because of its budget airline biz model…however if we look at other budget airlines…those that eventually folded up took the model too far…bad service with the excuse of cutting costs…if CEB doesn’t wake up and tweak their biz model PAL with Mr. Ang at the helm may just get back its market share in a big way…I’ll hold off buying CEB…Bo has other recommended companies to buy anyway.

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