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

Highly volatile in the past year. They had to give away or sell the C Series, despite expectations for high demand. BBD has always been difficult to understand given THAT their transportation division suffers many negatives (i.e. long-delayed Toronto streetcars) as well as positives. He owns CAE instead.

They just signed a big deal. Thinks it will do fine. Airline side is a drag, but Airbus will get them out of that. Excellent product. Prospects look bright. Stock will move up if they can get the South African problem behind them.

(A Top Pick Jul 19/18, Down 15%) It is a longer term play because it is a longer term business. The trade talks don't help. Their transportation business is still in a growth mode and they still have to deal with the 'C' series. It takes a while to turn around the business.

Still has way too much debt, as they have had for too many years. He likes the new management changes. The CEO has been doing a good job. Aircraft is in a good place now. They have raised some cash recently, by a building sale or a sale-and-leaseback. This is probably a good time in the cycle for Bombardier, but the only way this company can create long-term value is to figure out how to get their debt down and generate free cash flow. If he owned the stock, he MIGHT hold it, especially because of rumours that they might sell a division (transportation), which could create shareholder value.

Have had a very difficult capital structure over the years. Tough if you have to have capital infused by federal and provincial governments. He is shocked that it has had such a good run. It has not executed the way you would want. He would prefer a cleaner balance sheet. He would look elsewhere.

He has not liked this company for a long time. As a result, he missed the drop down and the run back up. It was a nepotism company, family run. Over the past two years, they have brought in some professional management. They are doing smart things now but the company is still highly leveraged and needs love from governments. Investors can enjoy the stock while it goes up but something always happens to Bombardier to end the rise.

Hold or sell at a loss? Not the time to sell. Just a year ago, teetering on the brink of oblivion. Has a big partner in Airbus, and a good product. Expects lots of sales. Turnaround situation. Still speculative, but things are looking better. Train side has good cash flow, good reputation, winning contracts.

It has been an impressive turnaround story. He had it as a top pick a couple of years ago. He sold after make a good profit on it. The company has turned the corner. They backed off of some of their 'C' series to focus on the train and rail business which has let the stock move up. It is highly cyclical so you have to be careful.