Bombardier Inc. is updated and rated Speculative (lower) Buy at CAN $3.89. This is an interesting company that certainly makes fun stuff – It makes Lear jets, other business jets, smaller commercial jets, high-speed trains and subway cars. But the profits seem inadequate and highly unpredictable. Management has managed to destroy large amounts of invested capital in the past dozen years. However it does have a very good order book at this time and so the short-term outlook while speculative could be considered fairly strong. I have about 1% of my portfolio in these shares. I’m not planning to sell that. I would consider adding to that as a speculative bet but would not want to place a very large bet on this company due to its poor earnings history.
It has received a very large order from Warren Buffet’s Netjets subsidiary. I have wondered in the past if Buffett might be interested in the company. I think he would definitely like the idea of owning a producer of planes and high-speed rail cars. He would also like the long-history of the company and the fact that the founding family still runs the business. But I am not convinced that he would like the economics of the business at all or that he would be be at all impressed by management.