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

A speculation, not an investment. It is something you could make a whole lot of money at or it could go to zero. An overlevered company that has been poorly managed for a number of years. There is a strong control block that doesn’t want to let go. Has been largely propped up by government largess, both provincially and federal. Thinks their C series is too delayed and too late.

The sentiment is negative because this is a company where nepotism has been in charge for a very long time. The former CEO bet the farm on a single airplane, and competition is eating them alive. A great plane, but there are no customers. Has a horrible balance sheet and horrible corporate governance.

Airbus and Boeing are doing their best to cause a lot of problems for the company. They have developed a leading world class new plane in the C Series, a fantastic product. You are likely to see a big order in the next 3-6 months, which will drive the stock upwards. In the meantime, he is sitting on the sidelines and watching.

It is well documented and under a lot of pressure. It should stay in the index. It will be helpful to the company when or if it has a turn around. He does not own it because of debt. They may get things turned around.

Is the 7.35% 2026 bond safe? This is not safe. There are so many bonds that this company has issued that will mature before this one does. A lot of things that are going to happen to this company. It has been propped up by governments for a long time. It is pretty safe to say that bondholders will take a haircut of some kind, before this thing is resolved.

This company is getting bailed out and is going to continue needing more bailing out. Predicts they will probably have to sell their train division, and the company will be run for the bondholders. The equity is a speculation now. The balance sheet is a horror story.

Thinks they are going to have to sell planes at a discount. The overruns and the time lag on the C Series were so great. He hates debt. They haven’t had a C Series sale in the past year. Have $1 billion plus thrown in from the Québec government as well as something from the pension plan and are begging the Fed’s to chip in. Has huge potential upsides, but could also possibly go bankrupt. One of those companies that could be a better Buy after the stock has doubled, because the risk could be 4X less. He is happy to stay away from this.

The Québec government has come into fund the C series jet, and this company has to come up with another $1 billion. If they can come up with it themselves, they’ll get 60% of the cash flow that is generated from that program, if it is successful. If the federal government comes in and funds it, they are going to get the money and Bombardier will get 10% of the cash flow. Have sold about 200 C series jets, but will have to sell another 200-300 to get cash flow breakeven to get a success. He doesn’t like the odds.

He would not buy it. The risk/reward profile is too high. They bet the farm on the ‘C’ series. They are trying to get very large orders from clients. The purchasers want to service them for a long time but it is questionable whether BBD.B-T will be around that long. It makes the prospect of getting more orders much, much more difficult. It is a coin toss.

Has performed much better than previously. However, they have a debt problem. Because of that it is not the kind of stock he would consider as investable. It is going to be pretty hard for them to overcome. Speculative.

Has no idea why the stock does not do better. Technically it is hard to talk about a dollar stock. It is just lost. You could buy a lot worse.

You could trade it. They have a tough road ahead of them. He does not invest in companies unless he has conviction for 3-5 years, which he does not with this one. He has suggested that airlines have put all their orders in with competitors.

(Market Call Minute) Would not touch it. Too much risk.

He is looking to buy this if the Fed comes in and supports it and management can get it to go. There is a lot of debt and you really have to have the sales on the planes. Leave this a bit more and see if the Feds come in.

(Market Call Minute) There are too many questions about how they find the ‘C’ series. There are better places to be.