Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Bombardier: This CANNOT Be Good.....

Situation:

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.