Bombardier Inc (B)

BBD.B-T

It is an interesting play here. One would need to understand the fundamentals which he does not focus on. Looking at the chart, there were issues and now a bottom is developing. You would need to take out the $2 resistance. He would avoid it. It is completely speculative on a turnaround.

Can they cover their debt payments? Transportation division is stumbling with an awful last quarter that pushed the price below 2$

Don't touch it. There's a huge hole in the balance sheet of $8-9 billion of funded debt with $7 billion of negative shareholders' equity. They sold off most of the products (C series) they can, like the Blue Jays selling off their stars, left with low-margin products. Meanwhile, you still have the same nepotistic, incompetent management of questionable morality in charge. It amazes him. Hopes the government stops subsidizing BBD, but an election is coming.

(A Top Pick Jan 10/19, Down 0.5%) Still likes it. It's cyclical and a heartbreaking stock with so many politics involved. Given volatility he will take some profits sooner than later. Long-term could be challenging. Today, it's good based on risk/reward. At least worth looking at. If it breaks below $2, there's 10% downside vs. 100% upside.

Bombardier bonds Don't buy one high-yield bond. Bombardier has long had negative cash flow that they haven't changed in years.

A poorly managed company that struggles to deliver on its products. There's no end to their problems. BBD needs to reduce its huge debt and get the family out of ownership, though it's not possible now. It also needs to get rid of its dual-class share structure.

A company that he really tried to like. There is a trust deficit. There is a potential for an upside. He definitely wouldn't be adding here.

They've sold off some of their businesses and are left with the core. They rely on their business jet. They are fairly levered and isn't in a rush to buy. It's fairly or over-valued now.

How does this sector behave in a recession? It's a high-growth cyclical stock, so it will underperform during volatility and outperform during market strength. It's down around 50% over the past year. He has recommended it in the past around $1.30, then he sold it around $3. Yes, there's big upside here, but also great volatility. Very risky.

Everytime it get close to $2, he buys. It's built a bottom at $2. A nice range between $2-4 and that's how he'd play it. BBD is fine long term given a constant flow of contracts. BBD should be much higher.

It'll come down to BBD executing and meeting targets, but there are ingrained cultural issues here.

Not a fan. But people extoll its virtues. It is cheap, but she's not a fan of value. If you want to trade it, go ahead. But it's not a long-term hold.

It is a good day today. It has been a bad 6 months. He has been short it. No cash flow or return on equity. They have too much debt.

They effectively sold their airplane division. He looks for companies with good balance sheets and strong margins. He does not see this as a good margin business and would rather look for more quantifiable investments.