Bombardier Inc (B) (BBD.B.TO)

They had a very positive announcement. Had heard that they needed 300 planes on the C series to be taken seriously, so this plus another order gets into 295. This means they are survivable, but the business is way too lumpy. Now they have an order, but they have to show that they can do it profitably.

This has never been a good business. It’s low margin, competitive, political, and on top of that you have the family that has dominated the company for so long and have made poor decisions. However, it has always been the traders dream. It can move quickly. As a trade there is probably some money to be made here. There is no way they are going to let this company go out of business.

(Market call minute.) He wouldn’t own this one.

It is a pretty complicated company. This is just too hard for an individual investor. It is tied to orders, bailouts, and restructuring. It is hard to get an edge on all of these. It could be up or down 20% on a day. Your time researching a stock is finite.

C series preferred? This company has had a really rough go, and maybe just coming off the mat. Not a huge fan. It has been very poorly run for a number of years.

This got into difficulty with debt years ago. When they cleaned up the balance sheet, he bought in. They got really dirty again with debt. They’re getting $1 billion from the Québec government with another $1.5 billion also. $2.5 billion is a lot of money. Now they want $1 billion from the Canadian government, but thinks the Canadian government has to hold tough and get the dual holding structure changed.

He keeps looking and looking and looking. They couldn’t get the C series out the door. If they can get the Delta (DAL-N) order, that might be enough to throw them over the top. Thinks they are very close to getting the minimum number of orders to get this thing going. Once that starts, the whole complexion of the company changes.

There was a report that Delta (DAL-N) gave a thumbs up to a big C series buy. Thinks this company is going to survive. The political situation is such that the governments won’t let this company die. They have a good product, but it took them far too long to get it out.

(Market Call Minute.) This is one he would avoid right now.

(Market Call Minute.) Everything is going wrong for them. Free cash flow is extraordinarily weak and will get worse. However, if the Feds do take over two thirds of the new C Series, that would surface value which would make him more constructive on the name.

A speculative play. The government does not want to let them go. You could trade it, but there will be tremendous volatility. They are talking about shipping jobs out of Canada and he does not think the government will continue to put up tax payer money if they do that. Don’t chase it. It is a speculative company.

They are going to reverse split. They are lobbying for about $1 billion in funding from the government. If this happens you are looking at about 35% dilution. This stock moves around on news so it would be better as a trading candidate. Stay away unless you have speculative money.

(Top Pick Mar 12/15, Down 52.65%) She bought after a management change. The ‘C’ series was going to be certified but the plane orders did not come in. She decided to put her money somewhere else.

Not keen on government bailouts, however if Canada wants to have an aerospace industry, currently employing around 42,000 people, Québec has made the 1^st move, and he hopes the Canadian government chips in as well. Sold his holdings prior to Air Canada’s (AC-T) order. If he had known about the order, he may not have sold.

He does not buy companies that are dependent on something good happening in the future. He thinks this is a lottery ticket. They are capital constrained in the ability to go on with their jet program.