bombardier
Toronto symbols BBD.A and BBD.B, is the world’s third-largest maker of passenger aircraft, after Boeing and Airbus. It also makes passenger railcars.
METRO INC. $25.25, Toronto symbol MRU.A, earned $58.1 million in its second quarter ended March 15, 2008, down 6.0% from $61.8 million a year earlier. Per-share earnings fell 3.8%, to $0.51 from $0.53, on fewer shares outstanding. If you exclude restructuring costs in the year-earlier quarter, earnings per share fell 8.9%. Sales in the quarter crept up to $2.37 billion from $2.36 billion, while same-store sales rose 0.3%. Strong price competition continues to hurt profits at Metro’s Ontario stores. However, the company is beginning to realize the benefits of a new computerized information system. A new distribution warehouse will also improve efficiency at its Quebec stores. Metro is a buy for aggressive investors....
TRANSCANADA CORP. $36.34, Toronto symbol TRP, fell about 9% this week after it agreed to buy the Ravenswood power plant located in Queens, New York for $2.9 billion U.S. The plant has the capacity to service 21% of New York City’s peak electricity load. The price is 10% more than TransCanada’s 2007 cash flow of $2.6 billion or $4.95 a share. TransCanada will probably issue $1.2 billion worth of new common shares to help pay for this purchase. TransCanada foresees as much as $2 billion in investment opportunities for capacity expansion and efficiency improvements at the facility. As well, Ravenswood provides diversification in power generation and into the U.S....
The markets rattled many investors this week with steep one-day drops. At times like this, it’s good to remember that even when a further decline lies ahead, high volatility generally signals that it’s “a good time to buy”, rather than “a good time to sell”. It’s also encouraging to see that despite the steep one-day drops, most major market indexes are still at or above the lows they hit in January. BANK OF MONTREAL $43.10, Toronto symbol BMO, fell over 10% this week after it announced writedowns of asset-backed securities and higher loan loss provisions. In its first fiscal quarter ended January 31, 2008, earnings fell 26.7% to $255 million or $0.47 a share from $348 million or $0.67 a share a year earlier. The latest earnings figure included a $324 million after-tax writedown of securities, plus a $38 million rise in loan loss provisions. If you exclude unusual items, earnings fell 8.3%....
BOMBARDIER INC. (Toronto symbols BBD.A $6.04 and BBD.B $6.07; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.75 billion; Market cap: $10.6 billion; SI Rating: Extra risk) continues to win new orders for its aircraft and railcars. Its total backlog is now a record $51.6 billion, or just over three years’ revenue (all amounts except share price and market cap in U.S. dollars). Meanwhile, Bombardier’s earnings in its third fiscal quarter ended October 31, 2007 rose 66.7%, to $0.05 a share (total $91 million) from $0.03 a share ($53 million) a year earlier. Revenue grew 23.5%, to $4.2 billion from $3.4 billion. Besides the strong earnings, the stock moved up after Bombardier confirmed it has had discussions with a Russian company regarding a possible investment in Bombardier’s railcar division. While a deal is far for certain, the company earns higher profits from aircraft sales than trains, so selling part of the train operation would improve its overall profitability....
LOBLAW COMPANIES LTD. $45 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $12.3 billion; SI Rating: Above average) offered discounts on purchases over $100 in the week before Thanksgiving. The company hopes promotions like this will help it compete with Wal-Mart’s new low-cost supermarkets. In the short term, however, the plan will hurt Loblaw’s profit margins. Loblaw is still a hold. BOMBARDIER INC. (Toronto symbols BBD.A $6.01 and BBD.B $5.99; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $10.2 billion; SI Rating: Extra risk) recently recommended that airlines ground older models of one of its planes, due to possible problems with their landing gear. About 90% of these planes are now back in service....
BOMBARDIER INC. (Toronto symbols BBD.A $6.29 and BBD.B $6.26; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $10.6 billion; SI Rating: Extra risk) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. It specializes in small business jets, and regional jets that carry around 100 passengers. The company also makes passenger railcars. In its second fiscal quarter ended July 31, 2007, Bombardier earned $0.05 a share, up 66.7% from $0.03 a year earlier (all amounts except share price and market cap in U.S. funds). The most recent quarterly figure excludes a one-time writedown of its investment in a group that’s refurbishing the London, UK subway system. Strong demand for business jets and railcars, particularly in China and Russia, expanded sales by 14.3%, to $4.0 billion from $3.5 billion. Bombardier should earn $0.21 U.S. a share in 2007, and the stock trades at 28.8 times that estimate. That’s reasonable in light of its improving prospects....
Air travel has rebounded strongly since 9/11. But high oil prices could hurt the ability of airlines to invest in new planes and simulators. Although riskier, we feel Bombardier’s wider sources of income gives it greater earnings potential right now than CAE. BOMBARDIER INC. (Toronto symbols BBD.A $6.29 and BBD.B $6.26; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $10.6 billion; SI Rating: Extra risk) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. It specializes in small business jets, and regional jets that carry around 100 passengers. The company also makes passenger railcars. In its second fiscal quarter ended July 31, 2007, Bombardier earned $0.05 a share, up 66.7% from $0.03 a year earlier (all amounts except share price and market cap in U.S. funds). The most recent quarterly figure excludes a one-time writedown of its investment in a group that’s refurbishing the London, UK subway system. Strong demand for business jets and railcars, particularly in China and Russia, expanded sales by 14.3%, to $4.0 billion from $3.5 billion....
HARTCO INCOME FUND $3.96 (Toronto symbol HCI.UN) is a thinly traded investment in the highly cyclical computer equipment industry. We feel it could have trouble maintaining distributions. Sell. BOMBARDIER INC. $6.50 (Toronto symbol BBD.A) continues to win new orders for new aircraft, including a $334 million U.S. order for 10 new jets from U.S.-based Mesa Air Group Inc. That’s just a fraction of Bombardier’s annual revenue of $15 billion U.S., but deals like this enhance its standing with regional airlines. Bombardier’s new alliance with a Chinese aircraft company should also cut its development costs. Buy. LEGACY HOTELS REAL ESTATE INVESTMENT TRUST $12 (Toronto symbol LGY.UN) reached $15 in June as speculation grew regarding its “strategic review”, including a possible sale. However, Legacy moved down after it received several non-binding takeover offers worth about $12.60 a unit. Even if Legacy decides against a takeover, the review has helped draw attention to its high-quality hotels. Hold....
BOMBARDIER INC. (Toronto symbols BBD.A $4.82 and BBD.B $4.79; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $8.2 billion; SI Rating: Extra risk) estimates that demand for business jets will rise roughly 75% over the next decade, based on order backlogs and growing orders from international customers. Demand for regional jets is also improving, particularly for larger, more fuel-efficient models such as Bombardier’s new 100-seat plane. The outlook for the company’s transportation division is also getting brighter. It recently won new contracts to supply trains for public transportation systems in the UK and Shanghai, China. Bombardier is a buy. The multiple voting ‘A’ shares are the better choice....
BOMBARDIER INC. (Toronto symbols BBD.A $4.55 and BBD.B $4.56; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $7.7 billion; SI Rating: Extra risk) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. The company is also a leading maker of passenger railway cars. Due to steadily rising demand, the company now plans to build a new 100-seat regional jet, which is slightly larger than its current 70-seat and 90-seat models. It now has 38 firm orders for the plane, and 23 conditional ones. The new plane will cost $300 million to develop; Bombardier earned $0.03 a share (total $53 million) in the three months ended October 31, 2006 (all amounts except share price in U.S. dollars). Each plane sells for roughly $45 million, and the company feels it can sell 400 of them over the next 20 years....