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BRIAN K. LANGENBERG, CFA is a strategic thinker, team builder and expert in global manufacturing, machinery, logistics and distribution. He is a trusted advisor to CEOs and other executives of public and private companies, institutional investors and high net worth individuals because of his... More
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  • Bombardier: This CANNOT Be Good..... 2 comments
    Jul 23, 2014 5:53 PM


    Bombardier just announced a new organizational structure of four segments by splitting Aviation into three units - Business Aircraft, Commercial Aircraft, and Aerostructures and Engineering Services.

    • Aerospace President & COO Guy Hachey is "retiring" at age 59 - with the biggest product launch of his career (CSeries) underway.
    • The "A&ES" business does not yet have a business leader.
    • A detailed implementation plan "is to be developed" over the next few months to be implemented by January 1, 2015.

    Our view:

    • This cannot possibly be good.
    • The stock likely trades down tomorrow.
    • Faith in management execution was already low.

    Recommendation: Value investors should buy the dip. Further patience will be required.

    • Bombardier is not the standard bearer for management execution and delivering results. We get it.
    • Bombardier is a publicly traded family owned business and its structure prevents adult supervision from activist investors.
    • But they make very good aircraft and the CSeries will be ultimately successful.
    • We can get to a 3-5 year target price range of C$11-21 per share from today's close of C$3.74.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Comments (2)
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  • bd4uandu
    , contributor
    Comments (2074) | Send Message
    It's been on my watchlist for a bit. Thanks for your thoughts.
    23 Jul 2014, 09:58 PM Reply Like
  • CapGoodsAlpha
    , contributor
    Comments (63) | Send Message
    Author’s reply » My pleasure
    23 Jul 2014, 10:37 PM Reply Like
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