Despite a slough of factors which led me previously to determine that Bombardier, Inc. (TSX:BBD.B) had enough problems to create serious near-term distress, the ability of the firm’s management team to dig deep and salvage the decades-long growth story which has been Bombardier is truly unbelievable.
The ability of Bombardier to create partnerships which, while giving the farm away, have allowed the company to survive, certainly deserves a round of applause.
I’ve also spoken at length about why I believe Bombardier to be a more dangerous short play than nearly any other company trading on the TSX due to what I called a "Canada put."
Essentially, my view is that the Canadian government has stepped up to back Bombardier, putting the company in a position where it simply cannot fail.
Having a significant percentage of downside protected in such a way can allow the company to worry less about going bankrupt, and more about how to invest in the future.
As such, Bombardier’s management team recently released two new large cabin luxury planes to complement its existing fleet, as the firm attempts to compete with other players in this space such as Gulfstream.
These new planes have propelled Bombardier’s share price higher, as investors begin to look forward to the potential for earnings, rather than backward at some of the scandals which have plagued the plane and train maker in recent quarters.
Invest wisely, my friends.
