Aircraft build time? - MaherMaher, thanks for your well reasoned reply. Sorry for not answering it earlier. I must have missed it the first time through.
"I do look at other issues, but my main concern is level and frequency of orders for either aerospace or transportation. "
I can understand your concern I'm just pointing out to you and anyone else who might be reading the thread, that in my view, it would be apt to give a little more emphasis to other considerations.
"I am also not blind to the risks in my investment choices. At present they are engaged in 3 new developments (Learjet 85, C series and CRJ1000) - none of these are without risks. The market seems to notice and is not bidding the shares much higher. Other companies that I have in my portfolio eg Ford are only waiting for the market to recover and the only risk is from other competitors. That is why Ford has increased 14 folds from its low of $1 and is at 60% above its value before the crash started."
Hopefully, you're not blind to the rewards either. Bombardier may represent greater risk in some aspects. That's something I've said myself in previous posts, but it also represents greater potential for higher rewards than many stocks.
I can't speak about Ford as I have no experience following that company, but I do know that rewards are often aligned with the degree of risk one takes on. In fact, they say it isn't so much how much you make, but how much risk you have to live with in order to make it. Most long term investors are happy enough with modest gains.
Bombardier didn't get as low as one dollar. It did go below $2 at one point, but then if we compare both companies at their low points maybe Bombardier was considered to represent less risk - or the potential for greater reward.
"Bombardier has many established products that it can sell, however, there is too much hope pinned on the C series. "
If you really feel there's too much hope pinned on C Series you don't have to own the stock.
I talk a lot about C Series because I'm particularly interested in it. If you want to talk about other aspects of the business by all means do so.
C Series is an important program for Bombardier, not just because of what it means to the bottom line, but also because it is a big step in the right direction - towards the manufacture of larger commercial jet aircraft. C Series takes Bombardier from the status of a niche player building business and regional jets into a future where it becomes a world player in building, lighter, cleaner, fuel efficient commercial jetliners.
"So why am I invested in Bombardier?
I was beginning to wonder...
"1. Its a 50% family owned business. From my experience family owned businesses of that magnitude tend to do well over the long term.
2. Their transportation division is the largest in the world and has been winning large orders in China, France, Germany, Canada, Africa and hopefully in the US and UK.
3 Orders for their business jets seems to be returning to normal.
4. Although the CRJ series and Q400 sales have stalled - I am sure sales will pick-up soon.
5. It is not the first time Bombardier takes risks with new products and it will not be the last time.
6. If the C series is successful (I think it will) I guess that Bombardier will look next at building 180, 200 and 220 commercial planes. I am guessing by 2020 they will venture into jumbo jets."
For the most part good points. I'd take issue with lumping Q400 and CRJ sales together though. I think prospects for these two market segments offer prospects which are not similar. From my perspective Q400 sales are suffering only from a downturn in the economy whereas CRJ sales problems run much deeper. It's something we've talked about on this board in the past, but I'll try to address it in a future post when I get a chance.
If everything goes well (big if) the shares of Bombardier can climb over $30 in 5 to 8 years - that is if you are willing to wait that long.
Well, I've owned Bombardier for more than 21 years now so what's a few more years? But waiting for the share price to rise isn't the only way we benefit from owning Bombardier because the company does pay a dividend which should also continue rising in the years ahead.
"I find putting a reasonable target price is a good strategy. My target price is $10. If it rises to $10 because of large orders - I'll increase the target price. If it rises because of market frenzy - I will sell and take my profits (something I should have done in the past)."
OK. I'm more of a buy-'n-hold kinda guy.