BBD "Valuation Remains Attractive" From TD Waterhouse "Our Best Ideas" section. In my view, this is a fairly accurate description of the situation. As optimistically as I may seem at times it is important to keep in mind that Bombardier faces some real challenges.
Anyone new to the stock should know that and realize this is a high risk/high reward situation. As I've mentioned in previous posts, it isn't a stock I'd recommend to the average individual investor.
I'm naturally biased toward optimism. I've owned this stock for many years. Unless you have a strong inrterest in aerospace and/or rail, or feel you have some special insight, or experience in this business, Bombardier is best left to institutional investors.
The average little guy simply doesn't need to be taking on that much risk with his, or her hard-earned savings.
"Bombardier’s valuation remains attractive in our view and we continue to expect additional commercial aerospace orders. However, we believe that risks to the outlook support a more cautious view on the stock. These risks include:
1) regional aircraft backlog erosion,
2) development and demand risk related to the CSeries,
3) the impact of growing European fiscal restraint on the Transportation segment
4) lingering execution issues in Transportation
1) RJs demand isn't likely to snap back. This is why Bombardier is investing in larger aircraft like CSeries, and refocusing more on its (much stronger) business jet line-up.
2) CSeries does present some risks. These are risks I believe Bombardier can handle, but the project could see delays
3) European turmoil appears likely to remain with us for some time. And this will perpetuate some dampening effect on demand even if infrastructure spending is still expected to rise globally.