Much in the way of positive news has driven Bombardier, Inc.’s (TSX:BBD.B) stock price higher in recent trading weeks. The company announced a partnership with Airbus SA in which the company would sell its CSeries plane division to the global aerospace manufacturer for the bargain price of $0.
Bombardier’s management team subsequently announced the first sale of its CSeries planes in more than a year, to the exuberant surprise of investors awaiting such positive news for quite some time.
With an increasingly bullish outlook for the transportation manufacturer, and a stock price which has continued to soar over the past month (nearly 30% over this time frame), expectations that the company’s rise has only just begun is certainly a temptation for many investors looking to take advantage of a company which many view as a value play.
After all, Bombardier remains nearly 90% cheaper than when it traded at its all-time high in the early 2000’s, and should the company be on its way to achieving its previous glory, betting against such strong forward momentum and potential upside may seem ludicrous to some.
That said, many of the long-term headwinds with the company relating to the business’ operating fundamentals and debt load remain, along with concerns about how the company has gone about obtaining lucrative contracts around the globe, as highlighted in a number of my previous pieces.
With a high-risk, high-reward profile underpinning the company’s rebound, I re-emphasize caution for investors considering Bombardier today until the dust truly settles.
Invest Wisely, my friends.
