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

The key continues to be their C series. Have they built a product that will resonate with potential customers? Spent a lot of money on it, and it has been a huge deployment of capital. So far the response has not been stellar. Their trains franchise is rock solid and is very strong in Europe. Thinks the jury is still out on this company.

$5.95 model price, 50% upside. He is bearish on Canada, however. He would sell if it broke EBV.

Doesn’t see a lot of upside in this company over the next year or 2. The overhang on this name is the C series. It is in flight testing now, and has been delayed a number of times. The company indicated they hope to get it in service in the 2^nd half of next year. They are at that period of time for airplane manufacturers where they are burning a lot of cash. On their transportation side, margins have been very slow to recover and they continue to restructure and lay off people there. Doesn’t see a lot of earnings growth for the next couple of years. If you own, consider selling and finding better growth elsewhere.

Below $4.10 it has always been a good buying opportunity. They are going to get their stuff together eventually on the ‘C’ series.

No interest to him at all. It never seems to get all of its operations working well at the same time. Balance sheet scares him.

Making a bit of a recovery. There is increasing interest in the C series jet. Recently out on a rail contract in Mexico. Analysts are carrying about $.40 a share in earnings, so it is trading at 10X earnings, which is not a bad price for a company like this. The market still has a little bit of concern about the cash burn associated with the C series jet. At this level, it is an interesting name.

The $3.50 level was really critical and pretty good. Until you see it get above the $4.75 and $5 marks, he would wait. $5 really clears the deck up until around $7.20-$7.50.

Longer term, more than a year, it has a very attractive future. Fundamentals are quite good and the stock is inexpensive on a multiple basis. The issue short term, less than a year, is essentially a weaker future. Spending a lot of money, so are incurring a lot of capital expenditure to develop the C series. The ramp to development of the C series order book is not all that clear. There have been a lot of issues with the C series. It will probably be a year before he is ready to commit money.

A lot of people want this to work and do well; hence there is a lot of expectation baked into it. Where it sits right now, it is probably fairly valued. There are structural challenges to the business. He questions the company’s market share in the regional jet market. It has fairly high leverage. While there is free cash flow, it is not as strong as a lot of analysts had thought. Also, don't forget the C Series’ costs and things like that. He would like to see a little more clarity in the business before jumping in.

Getting the orders seems to be a problem. Feels they have just been behind the curve so long that people want to see orders. You need them to be financially feasible. A very tough business. Their rail side is a bit more positive.

Thinks there will be a day when it has its day. It is entirely focused on the ‘C’ series. All eyes are on the ‘C’ series and not on new contracts elsewhere in transportation.

You need to be patient with this for many, many years. It hasn't had the lift that one would like. Good products and good technology, but whether the next generation of planes will get delivered or not is questionable. If you own, you might want to consider switching to Magellan Aerospace (MAL-T). (See Top Picks.)

It has just sat there and it generally is a terrible business with high capital costs, unions and it is always dealing with free cash flow. Last quarter they used up about 370 million. They may have to go to the capital markets. The ‘C’ series keeps getting delayed.

Usually stocks like this do well this time of the year. Chart shows a “forever” trend of up and down. Maybe when it gets back up to around $5, you might want to actually take a look as it may come back down again. Technically, it has broken its trend, beginning to consolidate, and starting to move up. He likes the stock at this point. From a technical and seasonal basis, it looks good.

A lot of people are Short on this. If they can have a nice earnings beat, he thinks there could be a very nice pop on the stock. If you own, he would not be selling, but holding to see how this quarter goes. The Cdn$ actually benefits a company like this.