Monday, July 21, 2008

Bombardier Inc

I bought shares in this company in 1987 (TSX-BBD.B) . Up until 2001, I was making some 35% return per annum on this stock. When the stock first dropped in 2002, I had still made some 28% return per annum on this stock. Even by the lowest point in 2005, I had made some 13% per annum on this stock. By that time, it seemed to be turning itself around, so I never sold. At the current price, I have made some 16% return on this stock per annum.

This company got into difficulty in 2003, and cut their dividend in 2004, then eliminated the dividend in 2005. The stock hit the low point in 2005 when it eliminated its dividend. This stock has been doing better since the low in 2005 and with the announcement of the final results for the quarter ending April 28, 2008, Bombardier has reinstated their dividend.

I certainly suffered big loses in my portfolio because of the drop in this stock, and it is still only worth 1/3 of what it was worth in 2001. But before it crashed, it was an excellent stock and it consistently raised its dividend and split it stock. I am hopeful that now that it has reinstated its dividend, it will again raise it consistently.

This stock has a controlling shareholder of the Bombardier family. A controlling shareholder is not necessarily a bad thing. I know that, especially in the US, they frown upon controlling shareholders. However, I believe that the Bombardier family has been working very hard to make this company an outstanding company again. I feel that when controlling shareholders work to make a company a fine investment for all the shareholders, not just themselves, controlling shareholders are good. I do not mind investing in companies, such as Bombardier that have controlling shareholders.

See my spreadsheet on this company at The problem with this company is that the stock price is only in Canadian Dollars, but the financial reporting is in US Dollars. To make the spreadsheet figures compatible, I have used the US Dollar financial figures and converted the stock prices into US Dollars. I also show revenue, earnings and dividends in Canadian Dollars. See my website at for a list of the stocks for which I have put up spreadsheets on web site.

Bombardier is a manufacturer of business jets, regional aircraft and rail transportation equipment. They also provide financial services and asset management. They are an international company, selling and manufacturing all over the world. The controlling shareholder is the Bombardier family. Its web site is

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional.

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