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Bombardier: A Cause For Cautious Optimism

Apr. 05, 2021 9:55 PM ETBombardier Inc. (BDRBF), BBD.B:CA21 Comments
Sanket Karve profile picture
Sanket Karve


  • Bombardier Inc. is a company that previously manufactured trains, public transport, commercial & business jets.
  • Bombardier Inc. has a highly leveraged balance sheet and hasn't enjoyed profits since 2018.
  • The company recently downsized to become a pure-play business jet manufacturer after selling its loss-making business units.
  • However it is a proven aircraft manufacturer and all its jets are much vaunted by industry professionals - including the Airbus 220, which was designed and previously manufactured by Bombardier.
  • The pure-play on aviation could lead the company to improve margins and post profits by 2025.

Main assembly facility of Bombardier Aerospace (Shorts) in Belfast
Photo by Niall_Majury/iStock Unreleased via Getty Images


To call the past one year challenging would be an understatement to the turbulence that corporations and people have had to face during this period. Whilst the COVID pandemic created opportunities for

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Sanket Karve profile picture
Independent research focused on equities, and more specifically retail, industrials and the technology sector. The research will be focused on unlocking a hybrid of value and growth situations in the market.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in BDRBF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (21)

Looks like with Dassault’s announcement of the 6X and 10x and Gulfstream pursuing G400 and G800 (on top of G700) that BBD is lagging in the R&D department. In 4 to 5 years their products will look antiquated. Maybe they can get Quebec to fund some new products.
Bdrbf has been thru the ringer. The C Series was a great idea undercapitalized. The trains capitalized on the urbanism trend but couldn’t deliver a quality product. Politically they now have operations on both sides of the border, don’t impact Boeing. Nice product if you’ve got a few spare million to throw around
ronclaros profile picture
I suspect Bombardier will find success un the business aviation platform. However, it will continue getting bailed by the Canadian government when and if the need rises. With the current issues going on at Boeing, this company should capitalize on alternatives!
@ronclaros What are you suggesting?
ronclaros profile picture
@chazsf suggesting to continue having some faith with Bombardier, for now.
@ronclaros Sorry, what are "alternatives"?
This was just recommended by a well known manager yesterday on CNBC, I forget his name though unfortunately. His thesis was similar to this article
There's part of this company that KICKS ASS and it ain't this part.
It's THIS part!!
DOO you know what I mean?! LOL!
@URL of York
These are two different companies. Bombardier family spun off the recreational products division from BBD into a separate entity in the early 2000’s. Quite frankly it is where the family’s heritage and passion lies (or at least latter did when they spun it off).
@Rob daSlob Agreed. The family retained 35% at the time of the sale, and probably still have it.
I've got a SeaDoo and it is in the top 3 favorite things I own!
SA-NJ52 profile picture
This is an unrealistic article that ignores the simple fact that it has been a plaything for the family who owns most of the shares.

The only reason that it has not gone into bankruptcy is that BBD.B is based in Quebec. Quebec businesses have always gotten money from government that would never happen if the company was based in Western Canada.

The company has sold the crown jewels - the C-series jet and the rail division - an is left with corporate jet business that has nothing unique or magical to offer the world.

I have owned this garbage stock for years. I did not sell out when I had the chance.

The author writes...

"I believe that the company's common stock is worth $2.84, and thus has a large potential upside."

I am happy to sell my shares at $3.

This article is a little lean on meat for why this risky company is worth my investment versus any other risky company so the reader is left with unanswered questions on how much risk and what would the upside be?

In the mid term (3-5 years) BBD is signaling cost control. This is disturbing for the 5 year window and out because their product line is mature. They just retired out the LR 75. The 605 is based on a 1970s design. The Global line is based on 1990s vintage. This in a business jet world where new is king. Signaling reduced R&D does not sit well with having a compelling product to move. I suspect they will continue to try and garner market share by cutting prices which erodes margin. Those customers will demand service (thru warranty or other) which means BBD will pivot the R&D savings to cover warranty cost or bolster service centers - which we have already seen in play. So this implies to me the cost savings may not fully materialize. So that’s my qualitative assessment which in itself stops my further review and means nothing to a reader without putting a quantitative value around it.

Similarly I think your article comes up short without a quantitative value to what does this equate to an investor.
TAS profile picture
Business jets will propel Bombardier? Did I miss an analyst pot party?There is by any measure going to be a huge reduction in business travel worldwide. And frankly, I still loathe the Bombardier puddle jumpers that make my flights miserable...where first class is a seat that is just as bad as coach.
@TAS Business jets have been growing 10%+ every year since the Great Recession and private jets only went down 10% during the pandemic compared to massive hits to commercial. Warren Buffett sold all his airlines, but kept Net Jets and Bill Gates/Blackrock recently made an offer to buy the largest private jets services company in January. Plus low emissions private jets are thought to be the next big thing in aerospace. If managed correctly, Bombardier is set to be the forefront of a massive new innovation in transportation.
vlad3368 profile picture
Thank you for good article on Bombardier, it's one of my favorite penny stocks to consider investing in.
SDLB profile picture
A +
@SDLB I'm surprised to see a fellow cannabis investor following BBD. I lost a fortune on these guys, how Bellemare is not in prison is surprising. Hopefully the new guy is better.
SDLB profile picture
@Mustang Mike did lost also a lot of money with them but bought several shares at .47 in early January hoping to recoup some of my money ...
@SDLB Well you are more brave than me. I just don't see how after selling most of their divisions, they become profitable for many years. But I guess there could be an appetite for private Jets, due to Covid.
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