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

Hasn’t run its business adequately well. Something fundamentally needs to change in terms of how they manufacture, their processes, their costs, etc. An economic recovery in the US has the ability help. It is going to take some time and some fundamental change for value to be realized.

This is on his watch list. In many ways it is a tremendous company. The rail business is great. The new CEO is making big changes. The company has tremendous upside, but at the same time the potential for bankruptcy has increased. He is not going to do any more on this until he sees more of a turnaround.

Sadly thinks bankruptcy may be an option, but hopes not. A great Canadian company which has built great products. Unfortunately its latest great product, the C series, has really had trouble. They now have a C series plane that beats the competitors, but are having real trouble selling it. The real issue is that if you don’t look like a strong company, people are more worried about buying your plane. Thinks they will come through it as there is enough demand in the world for their type of aircraft. You don’t make money on a new airplane until you have sold 1000 of them.

Tough business. High fixed costs. Long, long lead times until they can get their product to market. Brought in new management which hopefully will help the situation. They are still going to bleed cash for the next couple of years, both on the C series before it gets into full production and on the commercial jet 7000 and 8000 series. If you want to be in this, look to trade it as opposed to buying it as a good company and sticking with it. He has no interest in this.

Has been a little disappointing, but bear in mind that new management has only been in place for a few months. There were hopes that they would be able to garner some more orders at the Paris air show at the end of June, but that didn’t happen. The 1^st flight for their C series is scheduled for early next year. They need to see more orders. She is going to give the stock a bit more time.

Has been on his list for many years. It seems that they keep snatching defeat from the jaws of victory each time. They have done some things that are really interesting. The management change has yet to come into play. It needs the C series to take off and hit critical mass. Once it does that, then he thinks this can get going.

One of those companies that he thinks is going to be a screaming buy at some point. It is cheap from a valuation perspective. Execution is where it really comes down to. It all revolves around the visibility of the C series. Certainly some change in the rail division would be helpful. This is one where you want to wait another 2-3 months on, but he is warming up to this name, because it is so inexpensive. Thinks the C series will work and is working, but we need to see that “book to bill” ratio a little bit more. Right now they just don’t have enough confirmed bookings and they are losing bookings.

There are different segments. Transportation, the ‘C” series and business jets. The business jets have good margins and have good outlooks. The transportation segment also looks good. The ‘C’ series is the overhang. Will they get orders? The air show did not come out with anything significant. This is not a bad place to be right now, however. Canadian analysts are always overly positive about this stock.

This is a company that has underperformed for quite some time. There had been a lot of hopes pinned on some of their new jets, and it looks like they are going to be delaying their global jets further. Stock keeps hitting new lows. If you own, he thinks you should take your lumps and move on.

The ‘C’ series is the key thing for the organization. There are cost overruns and they are behind schedule and then there is the order book. Business jets are still an improving environment. It is a big capital expenditure for little revenue. In rails there are specific projects, particularly in France, but overall there are a lot of question marks. You have to watch the ‘C’ series and the drain in resources.

We are in limbo still. Their tests have gone quite well and they had encouragement from Swissair. Orders are hopefully coming. They talked about the 100 and 300 series’ and now the 500 series. He thinks that will be a little tough. He thinks the jet will work out and of course they are doing wonders in the rail area. They should be in better shape a year down the road.

He got out early because the debt had gone up and the ‘C’ series was not selling as well as they said. He sees the same problems there as before. He could see selling it for a tax loss. It has huge upside potential, but there is danger that it could go bankrupt in the future. He would be happier not to own it right now.

The last two years he has always said to stay away from it. It is a tough business. They have to take a huge gamble with shareholder money. They need a big shakeup in management to turn this thing around.

They raised enough cash to support their free cash flow burn for the next couple of years, to build up their C series development program. Management is now focused on improving margins and there is likely some low hanging fruit there. Thinks they could spin out the BT and they could do that in an intelligent way and still retain partial, and that would be accretive for them. Expects revenues to fall and margins stay flat over the next couple of years. A very big ship to move and you do need structural changes to improve margins. Not the best place to be deploying capital right now.

The Paris air show starts today. He is intrigued by the new CEO with decades of industry experience. It has been reset at a lower level. By the end of 2016/17 their ‘C’ series should be up and running. There should be 75% upside, but it is a speculative buy.