Sunday, November 11, 2012

"Happy Veterans, Remembrance and Armistice Day to all the war veterans around the world. Looked for a defense stock and was led to this great value play."

Dow Jones Industrial Average 12815.39 (Down Big!)   Week Ending  11-09-2012       

   I tried to find a defense stock to write about in honor of Veterans Day,  but I could not find one that I was totally crazy about for a 1 to 3 year investment on fundamentals.  What I did fine though was a stock that does not fit my investment rules and it is a stock under $5.00 per share.  I feel though that this company has a very bright long term future and that as a speculation stock, I would present it to this audience.  Sometimes you just need to go off the grid when a really good value presents itself.

Bombardier Inc. CL. B
(Symbol BDRBF.PK (OTCQX exchange), $3.40 US) 
Speculation (ROE and PEG rules not applied)

Joseph-Armand Bombardier was a mechanic who dreamed of building a vehicle that could "float on snow". In 1937 he designed and produced his first snowmobile in his small repair shop in Valcourt, Quebec.
Bombardier's technological breakthrough in the design of bush vehicles came in the mid-1930s when he developed a drive system that revolutionized travel in snow and swampy conditions. In 1937 Bombardier sold 12 snowmobiles—named the B7 and, in 1942, created l'Auto-Neige Bombardier Limitée company.
The stock is currently down from the last earnings report but their are many positive developments.
Bombardier Learjet announced November 10th that its unionized employees in Wichita, members of the International Association of Machinists and Aerospace Workers (IAMAW), have voted to accept a proposed contract agreement, ending a strike action that began on October 8, 2012. Employees may return to work as early as November 12, 2012.
2nd, Bombardier has a Strong backlog of $58.6 billion, compared to $53.9 billion as at December 31, 2011 
3rd, Their C-Series program making solid progress with first flight now scheduled by the end of June 2013 

4th, Bombardier is also opening up a new Monorail plant in Brazil
which is a great development. They also make lot's of other cool stuff like ATV vehicles. 

Actually the PEG ratio on this stock is 0.59 currently and the stock was trading above 6 dollars as recently as July 2011.  Also the Return on Equity is 41.23

CNBC shows that this stock a 0.10 cent dividend which would be a 3.06 % yield , but I would want to verify this info.2013 earnings are looking like 0.50 cents per share which would be a very reasonable PE ratio to the current price.
Bombardier Inc. is a manufacturer of transportation equipment, including business and commercial aircraft and rail transportation equipment and systems, and is a provider of related services. The Company operates in two segments: aerospace (BA) and rail transportation (BT). Aerospace is engaged in the design and manufacture of aviation products for the business, commercial, specialized and amphibious aircraft markets. Transportation is engaged in the design and manufacture and and support of rail equipment and systems, offering a range of passenger railcars, locomotives, light rail vehicles and automated people movers. It also provides bogies, electric propulsion, control equipment and maintenance services, as well as complete rail tranportation systems and rail control solutions. BA's aircraft portfolio includes a line of business aircraft, commercial aircraft, including regional jets, turboprops and single-aisle mainline jets and amphibious aircraft.
I believe that the smaller jet market should have very good growth over the next 5 years. 
I don't know if you have ever flown a short city hop in one of their jets but they ride smooth as silk , and you don't even hear the engines running.

So this is my pick for this week. What do you think?


1 comment:


    Bombardier inks 7.8 Billion dollar deal, Largest sale in the company history! 11-27-2012