Tell me I'm an idiot....

I want to buy some Bombardier.

Definitely an idiot. That said, their debt is pretty juicy yield and I figure the Quebec government pretty much de facto guarantees it.

Preferreds? Or senior?

Don’t think it will be above $7.00 in five years?

It may be, but it will likely fall back at some point. I don’t like the family management nor Quebecois management. I don’t like their story: a jet that doesn’t fly (yet, they say) and trains that auster governments won’t buy. What’s bullish about them? They’ve been in this rut for a decade. I was referring to their senior debt. I see a YTM on a Dec2026 bond at 6.1535%. That’s Canadian dollar debt though. Prefs are at about 7% yield. Not sure if the prefs are tax advantaged for Americans after withholdings and what not.

Not married to the idea. But assuming new jet gets out the door, revenue will sky rocket. Billion plus extra per year for a while. Four years of back log on many product lines. Comps well to peers in many catagories. Russians like doing business with them. Large barriers to entry. Hard to build jets from scratch. Increasing airliner demand. Backlogs across industry. Translate to profits…that’s why i may be an idiot.

Yeah, the first bit is believable then you include “translate to profits.” This firm has poor execution. Embarer can make things cheaper than inflated Montreal “businessmen.” Read up on their management team before you leap. Maybe former trader will weigh in on his provincial counterparts

Yeah, thinking it translates to profits is why I think I might be an idiot. The revenue should come. You’re saying it won’t make it to the bottom line. The market agrees with you for sure.

I’m also not 100% convinced they will sell the C-series in the scale needed to return healthy margins. But even if they do achieve scale, this company doesn’t have a good record of returning that to shareholder pockets. The stock price tends to jump on orders then falls as people realise there won’t be much profit. This is nothing new to BBD. Even Air Canada won’t buy their jets, going with Boeing and Embarer.

When you said you wanted to buy some Bombardier, I thought you meant this stuff at first…

[video:http://www.youtube.com/watch?v=NY_WJjyyur0&index=33&list=PLB578CC93871E107C]

The stock was at $20 a decade ago. They are retructuring and cutting jobs now which is positive for shareholders. They do have a $65 billion order backlog. I don’t touch it as it’s not a space I understand well.

You don’t like québécois Management ? Wtf is that supposed to mean ?

Its run by a bunch of political old school Québécois and has been forever. Expecting the same management to do better next time is folly. I’m sure there are good Québécois managers. But I don’t trust those involved in politics in Quebec, not as deeply as these boys. There is so much corruption and nonsense there. Whether BBD is involved, probably not. But I will buy companies in a more favourable jurisdiction with managers that aren’t old boy Quebec politicos.

Shit, I’m reconsidering based on some wannabe aviation expert(actual aviation, not investment) on the internet. No offense. I really am an idiot. Didn’t really discount Quebec being a complete cluster fuck.

Ok. Can’t really argue with the corruption part. Do you have any concrete example though ? I find it kind of naive to discount such a firm because of corruption though. Firms involved in public works / infrastructure all over the world are corrupt to a certain extent. Also, have you travelled ? All over the world you will see bombardier in public transportation networks.

A concrete example of Quebec corruption tangled up with business?!? The list in the last five years could fill a book. McGill Hospital, the whole Charbonneau Commission, SNC. BBD itself was investigated in Algeria (no adverse findings to my knowledge). Having Sheila Fraser on their board gives me some comfort, but only about integrity. The company is still a dog. On top of this, Quebec is not a business friendly environment. Everything is political. Unions carry a heavy stick. Look at BBD’s board. Its pretty much a political advisory team. I won’t tolerate corruption in my holdings, but you can, that’s up to you. However, it can have a big impact on share prices if shit hits the fan. And yes, Bombardier is a major player in public transit. In countries strapped for cash and looking to reduce spending. And despite being a major player, their returns to shareholders have sucked. What is going to change? What is the catalyst here? If you think the C-Series is the answer, well have fun on that wildcard gamble. Its the same damn people doing the same damn things and everyone is hoping for different outcomes. This group has had a decade to fix this. I don’t need to be an aviation expert to tell you that’s generally a warning sign on an investment.

Sounds like a fair argument. Even if projects are a success, the spoils might not make it to the shareholders. Something to consider for sure.

Also look at their share structure. In a typical company, this board would have been punted years ago.

There’s a reason most people don’t make good money in the markets. Instead of relying on blanket statements, you should do your research. The reason Bombardier hasn’t done well has nothing to do with where they are headquartered.

If you bought Alimentation Couche Tard, Quincaillerie Richelieu, Banque Nationale and Metro Inc. 15 years ago, you would be travelling the world sipping on tequila on a yacht right now. All run by good, old Quebecois guys in Montreal. My buddy works for Canadian National and participated in its ESPP plan from the start. All the stock did was increase twentyfold in the last decade and a half.

Quebec Inc (as they call it here) had a record year in 2013 for foreign acquisitions. Cogeco, CGI, Saputo, Genivar, Stella Jones, Fiera Capital were some among many buying international entities.

What? I make all decisions based on statements from strangers on the internet. Is there a better way? I even mention usernames when i make the pitch. Your avatars actually appear in the annual reports. Really impresses the investors.