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Blue Bird: Take The Long View

Jan. 03, 2022 8:38 PM ETBlue Bird Corporation (BLBD)10 Comments
Vince Martin profile picture
Vince Martin


  • Amid a crash in EV plays, and following a soft fourth quarter earnings report, Blue Bird stock has pulled back sharply.
  • On its face, the sell-off has some logic, as BLBD hardly looks cheap at the lows.
  • But the market is focusing on near-term pressures on a cyclical business, while ignoring still-intact long-term tailwinds.
  • We've seen this reaction before, and it presented a buying opportunity. This time does not seem different.
School bus

stu99/iStock via Getty Images

Since Nov. 16, Blue Bird (NASDAQ:BLBD) stock has declined 38%. There are two core explanations for the plunge.

The first is that stocks like BLBD generally have struggled. While broad indices continue to hold up, we've certainly seen pockets of the market

This article was written by

Vince Martin profile picture
Overlooked Alpha launched April 2022 - subscribe at overlookedalpha.com. Some OA articles are also available here at Seeking Alpha.I've been contributing to Seeking Alpha and other investment websites since 2011, with a general (though far from rigid) focus on value over growth. I got my Series 7 and 63 back in 1999, and watched the dot-com bubble peak and then burst in real time at a small, tech-focused retail brokerage in NYC.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BLBD either through stock ownership, options, or other derivatives. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (10)

Aricool profile picture
here is my answer:


...Michel Daneault, vice-president of Girardin Autobus, adds that while the Blue Bird buses in this deal are built in the U.S. (Girardin makes a line of smaller, Micro Bird buses locally), they qualify for the Quebec subsidy because of a loophole that allows electric bus dealer/manufacturers to import and “sell 200 big buses manufactured from another country,” explains Daneault, in an interview with Electric Autonomy Canada. “That’s why we have the possibility to sell 200 [of our Blue Bird] buses for the 2021-2022 school year.”

“Presently, Lion Electric buses have about four per cent of the market share, and the rest of the shares are spread between the rest — Girardin, Autobus Thomas and Leeds Transit,” says Daneault. “So far, Girardin is number one with close to 60 per cent of the [total school bus] market share. Our goal right now, [as the market moves to electric] is to stay at our position and to keep our market share because we built this position for 62 years and we want to continue to build on it.”
Aricool profile picture
Great report/analysis on $BLBD.

Who is this Girardin/Micro Bird competitor to Blue Bird? Micro Bird seems like a small time, 'mom and pop' knock-off of Blue Bird.

They apparently got the order from Quebec. So, unclear why they mentioned it as a good thing in the CC if the competitor got first orders there.

Girardin and its partners Micro Bird in Drummondville, Ecotuned in Varennes and Blue Bird Cummins PowerDriveTM make up a complete electric school bus offering of Type A, C and D, 100% electric, including heating for an additional GHG reduction.

“Micro Bird is a family-owned and operated company. Since 1966, we have pushed ourselves forward to continuously innovate and build the best products available on the market. After 55 years as a Type A school bus manufacturer and supplier, Micro Bird developed a reputation as the industry leader thanks to the quality of our products and our relentless drive towards innovation”
Thoughts on the earnings call? Seemed a bit underwhelming to me.
Honus profile picture
@Seeburto I haven't listened to the call, but I carefully read through the call transcript and this story looks very positive if you're able to look past the next 2 quarters. Backlog is up 336%, product mix of ICE vs. green is improving, and they're going after the luxury motorhome and last-mile markets. The issue for the next 2 quarters is same as for this past quarter - costs up and some parts hard to source (the only thing limiting production), and price increases won't start to flow through until Q3-Q4. Liquidity is fine, experienced management team is now in place, and they booked a 30-unit EV order in Q4, the largest EV order yet received from any school district.

BLBD is an EV play that is on nobody's radar yet because the numbers are insignificant, but unless the whole green movement is a passing fad there will be growing pressure on school districts across the country to slowly migrate away from ICE buses. That market, the number of ICE buses that will eventually need to be replaced, is more than 500K. Some large % of that demand will be met by BLBD.
Vince Martin profile picture
@Seeburto I was modestly whelmed. I'm a bit surprised the stock is up 11% here, to me the story is pretty much the same as it was when I wrote this piece six weeks ago. they've got a big long-term opportunity and some short-term challenges, we knew that before the ER and we know that after.
Honus profile picture
Thank you for the work here, much appreciated. I've been following this company closely and added below $15 - this may not come back quickly, but there's value and potential here and I don't mind being a bit early.

As a side note, my homework on BLBD has also led to an interest in Nuvve as a tangential play. More speculative, of course, but very interesting as an under-the-radar EV idea.
Vince Martin profile picture
@Honus yeah thats an interesting partnership b/w BB and Nuvve. I haven't done DD on Nuvve but it's on my list.
Northern Reflections on Value profile picture
Agreed. Would nevertheless be interested in seeing how the next couple of quarters go -- but maybe EV enthusiasm will help carry it through the business softness, relative to 2020.

Lion Electric (LEV) looks to be a key entrant in the EV school bus space.
Vince Martin profile picture
@Northern Reflections on Value yeah, should have talked up LEV a bit more as a competitor...I haven't seen much to suggest that they can win but should have given them a bit more shrift here.
Dinesh S profile picture
looks good
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