We’ve downgraded Bombardier

Article Excerpt

BOMBARDIER INC. (Toronto symbols BBD.A $2.55 and BBD.B $2.53; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $4.4 billion; Price-to-sales ratio: 0.3; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) plans to sell shares in its transportation division to the public. This business makes passenger railcars and accounts for 45% of Bombardier’s total revenue. The company expects to complete the sale in the fourth quarter of 2015. The new shares will mainly trade on Germany’s stock exchange because that’s where this business is based. Bombardier will retain a majority stake in this new company. Bombardier also recently suspended its dividend and sold new shares to shore up its balance sheet. The cash should help the company finish developing its new CSeries jet. Bombardier has firm orders for 243 CSeries planes. If buyers exercise their options and other agreements, that figure would rise to 603 aircraft with a total value of about $39 billion U.S. As the…

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