bombardier

BOMBARDIER INC. (Toronto symbols BBD.A $1.75 and BBD.B $1.70; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $2.9 billion; Price-to-sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) recently ended talks with European aircraft maker Airbus that would have given that company a controlling stake in Bombardier’s new CSeries passenger jet. In exchange, Airbus would have helped Bombardier pay for the new plane’s development costs. The company still plans to begin delivering the CSeries in 2016: it has firm orders for 243 planes worth roughly $16 billion U.S. However, ongoing delays have halted new orders. Bombardier is still a hold.

Chorus Aviation, $5.61, symbol CHR.B on Toronto (Shares outstanding: 114.6 million; Market cap: $685.4 million; www.flyjazz.ca), formerly known as Jazz Air Income Fund, is Air Canada’s main regional affiliate. Chorus owns Jazz Air, Canada’s largest regional airline and second-biggest airline overall, based on the number of planes it operates and routes it flies. Jazz Air and Air Canada have a capacity purchase agreement (CPA) under which Air Canada buys almost all of Jazz’s seats based on predetermined rates. The company’s current CPA with Air Canada provides the stable long-term cash flow it needs to maintain its monthly dividend and buy new aircraft....

BOMBARDIER INC. (Toronto symbols BBD.A $1.75 and BBD.B $1.70; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $2.9 billion; Price-to-sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) recently ended talks with European aircraft maker Airbus that would have given that company a controlling stake in Bombardier’s new CSeries passenger jet. In exchange, Airbus would have helped Bombardier pay for the new plane’s development costs.

< p>The company still plans to begin delivering the CSeries in 2016: it has firm orders for 243 planes worth roughly $16 billion U.S. However, ongoing delays have halted new orders. < p>Bombardier is still a hold....

BOMBARDIER INC. (Toronto symbols BBD.A $1.53 and BBD.B $1.46; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 2.2 billion; Market cap: $3.2 billion; Price-to-sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) owns 50% of a joint venture in China that has won an order to build 15 high speed passenger trains for that country’s rail system. The company’s share of the $381- million U.S. contract is $190.5 million U.S., or 1% of its annual revenue.

Deals like this enhance the prospects of the railcar division as Bombardier prepares to sell part of it in an initial public offering later this year.

Bombardier is still a hold.

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BOMBARDIER INC., Toronto symbols BBD.A $1.89 and BBD.B $1.86, jumped 42% this week in response to media reports that a Chinese company has offered to buy a majority stake in its passenger-railcar business, Bombardier Transportation. The reported price of $7 billion U.S. to $8 billion U.S. is roughly 2.4 times Bombardier’s $4.2-billion (Canadian) market cap (or the value of all of its outstanding shares). The company has denied that it plans to sell the railcar business. However, it still intends to sell shares in Bombardier Transportation through an initial public offering later this year—though it will continue to own a majority stake....

MAPLE LEAF FOODS INC. $22 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.8 million; Market cap: $3.1 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.5%; TSINetwork Rating: Average; www.mapleleaf.ca) gets 8% of its revenue by exporting packaged meats to the U.S., and the lower Canadian dollar makes these products cheaper to American buyers. The weak dollar also makes imported meats more expensive in Canada. These benefits come while Maple Leaf takes steps to improve its long-term outlook, including a major restructuring involving closing older plants and shifting their operations to newer facilities. However, it could take a year or more before the company realizes the plan’s full benefits. Maple Leaf Foods is a hold....

A reputation for friendlier service, lower fuel costs and 41 consecutive profitable quarters help make WestJet one of our top value stocks.

WESTJET AIRLINES $24.67 (Toronto symbol WJA; TSINetwork Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 125.8 million; Market cap: $3.1 billion; Dividend yield: 2.3%) serves 93 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 107 modern Boeing 737s are 30% more fuel efficient than older jets. In June 2013, the company launched WestJet Encore, its Canadian regional airline. This business now operates 22 Bombardier Q400 NextGen turboprop planes, which seat 78 passengers. The Canadian airline market remains highly competitive, especially with Air Canada expanding its Rouge budget airline to serve more leisure destinations in Europe, the Caribbean, Mexico and the U.S. However, WestJet is now taking delivery of its Boeing 767 widebody aircraft. That will let it compete with Air Canada internationally; it could add more cities in Europe, as well as South America or Asia....

WESTJET AIRLINES $24.67 (Toronto symbol WJA; TSINetwork Rating: Extra Risk)(1-877-493-7853; www.westjet.com; Shares outstanding: 125.8 million; Market cap: $3.1 billion; Dividend yield: 2.3%) serves 93 destinations in North America, Central America, the Caribbean and Europe. Its fleet of 107 modern Boeing 737s are 30% more fuel efficient than older jets.

In June 2013, the company launched WestJet Encore, its Canadian regional airline. This business now operates 22 Bombardier Q400 NextGen turboprop planes, which seat 78 passengers.

The Canadian airline market remains highly competitive, especially with Air Canada expanding its Rouge budget airline to serve more leisure destinations in Europe, the Caribbean, Mexico and the U.S. However, WestJet is now taking delivery of its Boeing 767 widebody aircraft. That will let it compete with Air Canada internationally; it could add more cities in Europe, as well as South America or Asia.

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BOMBARDIER INC., Toronto symbols BBD.A $1.75 and BBD.B $1.63, has denied media reports that it’s planning to merge its passenger-railcar business (Bombardier Transportation) with Germany-based Siemens AG. However, the company still plans to sell shares in Bombardier Transportation through an initial public offering later this year—though it will continue to own a majority stake. Bombardier will probably use the cash from this sale to pay down its $8.9-billion U.S. long-term debt, which is a high 315% of its $3.7-billion (Canadian) market cap....