INVEStING IN BOMBARDIERAs I've said before, I am a trader, not an investor. I do on very very rare occasions take investment positions, but those are few and far between. IN my next life, I'll be an investor. But in this life, it just doesn't mix well with my personality.
I've always followed the Bomber story, and have played the stock any number of times as a trade or swing trade. The Bomber has been very very good to me. The stock started showing up on some of my scans last week, and I now have a healthy trading position in the lower $19's. I'll trade it accordingly
But here's the thing. I'm truly considering taking an investment position in Bombardier, as the risk/reward at this point looks to be highly favourable at present. The point where you WANT to buy is where there is a disconnect between positive developments and shareprice, and I would say we now have that more than at any other point I've seen in the past deade. Here's my thoughts.
1) The path to where Bombardier now is has been fraught with misteps over the past decade. In fact, I'm a little surprised they survived at all. A lot of people got burned in those times, and there may be some legacy bad feelings. Understandable. But that's part of the disconnect at present. Bombardier has reivented themselves, and have actually done quite a remarkable job of it. Imho, they are now a fully viable company going forward. That negative legacy passes, and often passes quickly. thank greed and opportunity to take care of that. Personally, I think we are at the point where the market will take a second look at the company, and upon doing so, like what they see.
2) Yes, right now the market is in turmoil. While some people look at the fear component, I look at the opportunity component. This will pass, and if the fear index is any good indicator (it is), then it will pass sooner than later. But it is this very fear that creates the opportunity further.
3) Bombardier is removing a good chunk of their debt? Good for them. THAT ALONE is an extremely positive sign. Yes, there was a huge downdraft, orchestrated I think, but welcome to the market. I've always considered the market the dirtiest pigpen on the planet. These games get played all the time. Fair? No. Fiar in the market is a myth I think. Start by recognizing you are at the bottom of the food chain of knowledge and you'll be a big step forward to doing well. It's why I pay such close attention to the trades going throuh and who is doing what. The footprints of those far up the food chain are there to see, and the clues within are extremely helpful. But back to the debt reduction. EXCELLENT move by the company, and a sign of good health.
3) Order flow I think is exceptionally good. There are two points here. One, People/companies want Bombardier's planes and are puttting up the money to stand in line. But also, the order flow is showing some resiliance to the current recessionary fears. Personally, I'm not really surprised by this. If you're in the snack-bracket where you have gazzilions of dollars and can buy best-in-class private jets, you're not really worried about recessions. There's a stat out there that 80% of the general public are actually fairly recession proof, and that recessions really only impact the bottom 20%...sad but true. Well the jet buying population is certainly well above the 80% general population, so a recession really isn't a big deal o them. They carry on and buy their toys as they always will.
4) Not only is Bombardier building ultra-high-quality planes, but I would dare say that they are getting some swag appeal. A private jet that breaks the sound barrier? That's bragging rights for sure. Again, this will also enhance the order flow.
5) Today's Singapore announcement is yet another sign of good strong health of the company. They are building with confidence to meet the need that they know is there. Again, well done.
All in then, I think there is a HUGE disconnec between the current share price and the strong possibility that Bombardier turly is the Phoenix. There is moeny to be made for investors for sure imho. For myself, i have to convince myself pretty hard to invest, and I'm ruyly close. For the vast majority of investors out there, I would easily consider the stock a screaming buy at currnet levels, given all the positives that are developing on so many fronts.
Well done Bombardier!