Opinions
Benj Gallander
Bombardier Inc (Pref-B)
BBD.PR.B-T
DON'T BUY
Dec 22, 2016
$8.530
Stock price when the opinion was issued
transportation equip & components
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DON'T BUY
Paying around 8%, so you're getting a nice yield however, the credit calling is deteriorating. Struggling with the aerospace side and margins are slipping. Transportation side is doing better, but not enough to lift their earnings. Thinks they can sustain their dividends on their preferreds, but if they see one more pickup, it will be cut.
transportation equip & components
COMMENT
If you want to speculate, then go for the equity. If you want less speculation, then go for the bonds. Preferreds are kind of a quasi equity in between. If the company goes bankrupt, you might see a couple of shekels coming from the Bombardier press. Usually the bondholders get $.20 on the dollar. He doesn’t think the story is over yet. The preferred shares gives you a 6.25% coupon.
transportation equip & components
DON'T BUY
There is a huge amount of debt at the company. The ‘B’ preferreds were trading at 8% but there is a lot of risk. He would be very wary of anything they say. He was glad he got out because he was afraid of what was going on with the ‘C’ series. They have constant bailouts. The preferreds are reasonably secured.