bombardier

BOMBARDIER INC. (Toronto symbols BBD.A $4.25 and BBD.B $4.23; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $7.6 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) had commitments in place for 382 CSeries planes, including 148 firm orders, at the end of 2012. If the buyers exercise all their options, these deals would be worth around $23 billion U.S. That’s equal to 1.4 times Bombardier’s 2012 revenue of $16.8 billion U.S.

Porter Airlines recently ordered 12 CSeries planes, with an option to buy 18 more. The deal is conditional on Porter winning approval for its plan to extend the runway at the Billy Bishop Toronto City Airport in downtown Toronto. The airline’s current fleet of 26 Bombardier Q400 turboprop planes flies out of the airport now, but the runway extension would be needed to handle the CSeries jets.

As part of the agreement, Porter also has an option to buy six more Q400s. If the airline exercises all of its options, the entire deal would be worth $2.3 billion U.S. Bombardier will deliver the CSeries planes in 2016.

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Bombardier continues to win orders for its new CSeries passenger jets, which are 20% more fuel efficient than current models. CAE should also benefit from strong CSeries sales, because it makes simulators that train pilots to fly the new planes. We see both stocks as buys, but CAE is the better choice for conservative investors.

BOMBARDIER INC. (Toronto symbols BBD.A $4.25 and BBD.B $4.23; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.8 billion; Market cap: $7.6 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) had commitments in place for 382 CSeries planes, including 148 firm orders, at the end of 2012....

BOMBARDIER INC. $4.13 (www.bombardier.com) has won a $440-million U.S. contract to design high-speed railcar components for a German rail operator. The company will also help build these trains. It did not say when it would begin deliveries, but the deal is equal to 3% of its 2012 revenue of $16.8 billion U.S....

AGRIUM INC., $94.59, Toronto symbol AGU, plans to continue expanding its retail operations after shareholders decided not to elect five nominees from activist investment firm Jana Partners to Agrium’s 12-member board of directors. The retail division has 1,220 stores in North America, South America and Australia that sell seed, fertilizer and other products to farmers. These outlets supply about 70% of Agrium’s revenue. The remaining 30% mainly comes from making fertilizers from natural gas. Jana, which owns 7.5% of Agrium’s shares, wants Agrium to spin off its retail division as a separate company. However, steady revenue streams from these stores help offset the cyclical nature of Agrium’s fertilizer operations....

PENGROWTH ENERGY CORP. $5.16 (www.pengrowth.com) has completed the sale of its 10.02% stake in the Weyburn oil project in Saskatchewan. It received $316.0 million, which is equal to 59% of its 2012 cash flow of $538.8 million, or $1.20 a share. The company used the cash to pay down its long-term debt....

TRANSCANADA CORP., $47.92, Toronto symbol TRP, continues to move ahead with its plan to convert its main natural gas pipeline, which pumps gas from Alberta to markets in central and eastern Canada, to handle crude oil. That’s because rising production of shale gas in the northeastern U.S. has lowered this pipeline’s volumes and hurt its profitability. The company is now signing up oil producers. If demand is strong, it will begin converting the pipeline. TransCanada did not say how much this would cost, but it should complete the project by late 2017. Converting this pipeline to oil would also improve TransCanada’s long-term prospects, particularly if the U.S. government rejects its proposed Keystone XL pipeline, which would pump crude oil from Alberta’s oil sands to refineries on the U.S. Gulf Coast....

BOMBARDIER INC. (Toronto symbols BBD.A $4.06 and BBD.B $4.06; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.9 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.5%; TSINetwork Rating: Average; www.bombardier.com) has received a firm order for 32 of its new CSeries passenger jets from Russian aircraft leasing firm Ilyushin Finance Co.

If Ilyushin exercises its option to buy an additional 10 planes, the entire order would be worth $3.4 billion U.S. That’s equal to 20% of Bombardier’s 2012 revenue of $16.8 billion U.S. The company did not say when it would begin deliveries, as it is still developing the CSeries plane. It plans to begin test flights in June 2013.

The subordinate-voting class B shares are the better choice because of their slightly better liquidity and higher dividend yield.
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TRANSCONTINENTAL INC., $12.40, Toronto symbol TCL.A, is the largest commercial printer in Canada and the third-largest in North America. It also publishes newspapers and magazines. The company plans to pay a special dividend of $1.00 a share on April 26, 2013, to shareholders of record on April 5. That’s in addition to its regular quarterly payout of $0.145 a share, for a 4.7% annualized yield. Meanwhile, Transcontinental earned $28.5 million in its fiscal 2013 first quarter, which ended January 31, 2013. That’s up 5.2% from $27.1 million a year earlier. Earnings per share rose 12.1%, to $0.37 from $0.33, on fewer shares outstanding....

ANDREW PELLER LTD. $11 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $157.3 million; Price-to-sales ratio: 0.6; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.andrewpeller.com) reported that its sales rose 4.2% in the three months ended December 31, 2012, to $79.8 million from $76.6 million a year earlier....

BOMBARDIER INC. $3.98 (www.bombardier.com) has won a$226-million U.S. contract to build 35 passenger railcars for Germany’s Abello Rail. The company will deliver these trains by December 2015. In addition, it announced new orders for its CSeries passenger jets worth up to $3.7 billion U.S....