bombardier

CAE Inc. continues benefit from air industry trends as it lifts earnings, cuts costs and diversifies its revenue beyond airline simulators.

SUNCOR ENERGY INC., $34.38, Toronto symbol SU, is selling up to 82.2 million common shares to a group of underwriters at $35.00 a share. That will increase the total number of shares outstanding by 5%.

The company will use the gross proceeds of $2.9 billion to buy an additional 5.0% stake in the Syncrude oil sands project, north of Fort McMurray, Alberta....

We chose CAE as top Conservative stock for 2016, as it stands to profit from several long-term trends.

For example, the growing need for new airline pilots, particularly in Asia, will spur strong demand for its flight simulators and pilot-training services....

We chose CAE as top Conservative stock for 2016, as it stands to profit from several long-term trends.

For example, the growing need for new airline pilots, particularly in Asia, will spur strong demand for its flight simulators and pilot-training services....

CGI GROUP INC., $57.32, Toronto symbol GIB.A, is Canada’s largest provider of computer-outsourcing services. It helps its clients automate certain routine functions such as accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses. In its 2016 second quarter, which ended March 31, 2016, CGI earned $268.3 million. That’s a 6.8% increase from the $251.2 million it earned a year earlier. Per-share profits gained 10.3%, to $0.86 from $0.78, on fewer shares outstanding. That missed the consensus estimate of $0.88. In the latest quarter, higher revenue in France, the U.K. and parts of Asia offset declining contributions from CGI’s U.S. defense clients. Revenue improved 5.7%, to $2.75 billion from $2.60 billion. The consensus forecast had been $2.74 billion. The weaker Canadian dollar also helped to lift revenue, contributing an extra $173.7 million....

BOMBARDIER INC., Toronto symbols BBD.A $1.84 and BBD.B $1.62, announced this week that Latvia-based Air Baltic has exercised its option to buy seven more of the company’s new CSeries passenger jets. The client had previously ordered 13 planes. Bombardier will begin to deliver the aircraft by the end of 2016. The company now has firm orders for 250 CSeries planes. Based on the list price for the aircraft, these orders are worth $18 billion (all amounts except share prices in U.S. dollars). To put that in context, Bombardier’s total revenue was $18.2 billion in 2015. However, the company typically offers discounts to customers that buy multiple planes. So the total value of its CSeries backlog is probably much less than the list price. OUR RECOMMENDATION: Bombardier is still a hold....

BOMBARDIER INC. (Toronto symbols BBD.A $1.52 and BBD.B $1.43; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $2.3 billion; Priceto- sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Speculative; www.bombardier.com) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. It’s also a leading maker of passenger railcars. The company recently formed a joint venture with the government of Quebec to build its new CSeries passenger jets. Under the deal, the province will pay $1.0 billion for 49.5% of this business (all amounts except share prices and market cap in U.S. dollars)....

Bombardier and BlackBerry (see box) continue to struggle with strong competition and shrinking sales. However, both are developing new products that should spur growth. As well, their sizable cash holdings help cut their short-term risk. BOMBARDIER INC. (Toronto symbols BBD.A $1.52 and BBD.B $1.43; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $2.3 billion; Priceto- sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Speculative; www.bombardier.com) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. It’s also a leading maker of passenger railcars. The company recently formed a joint venture with the government of Quebec to build its new CSeries passenger jets....

WESTJET AIRLINES, $20.34, symbol WJA on Toronto, started flying between Toronto and Boston this week. The new service will operate three times daily. The route is operated by WestJet Encore, the company’s Canadian regional airline. Encore started up in June 2013. This business now operates 28 Bombardier Q400 NextGen turboprop planes. Each seats 78 passengers. The flights to Boston are WestJet’s first cross-border route for Encore. The service will allow passengers from Boston to Toronto to connect into WestJet’s expanding Canadian and European networks....

CANADIAN TIRE CORP., $129.83, Toronto symbol CTC.A, saw weaker sales in the latest quarter, as warmer-than-usual weather hurt demand for winter goods such as snow shovels and tires. Lower gasoline prices also dampened revenue at its gas stations. The company’s overall sales fell 7.5%, to $3.4 billion from $3.7 billion. Cost controls and lower marketing costs boosted company earnings, despite the revenue fall. In the three months ended January 2, 2016, the company earned $225.2 million, up 8.1% from $208.3 million a year earlier. Earnings per share gained 13.6%, to $3.01 from $2.65, on fewer shares outstanding, easily beating the consensus estimate of $2.55....