Comments (11)

Mar 14, 2009

As long as you can back it up with some good analysis, it'll work fine. Careful though, the business jet market is getting creamed recently, used jet inventories are skyrocketing and nobody's buying new because of the bad publicity that surrounds private jets.

If you go with Bombardier, make sure you can refute those points.

  • Capt K
Mar 14, 2009

It doesn't matter what you pick, as long as you can substantiate your case. It's more a matter of what type of words you use and knowledge of financial markets that you express that will matter more than whether your stock is actually a good pick or not.

Just be prepared to read all the stories on the company, so that when your interviewer asks about an article that came out last week on bombardier, you are ready to discuss it.

Mar 14, 2009

I agree with captk and stk123, but would like extend the argument a little further.

Since it's not really about the company you pick (and more about demonstrating your knowledge of the market), it may be wiser to go with something that's not a household name. As far as Canada is concerned, Bombardier, RIM, Potash, etc... these have all become cliches that everyone and their grandmas seem to be experts on.

If I were you, I'd pick something a little less obvious. Just my 2 cents.

Mar 14, 2009

Chicks dig jet skis.

Mar 23, 2009

i havent researched bombardier but the jet market is in a tailspin. BAD BAD stock to pitch IMO. might make it seem like you have not a clue what is happening in the market....

gulfstream is dragging down general dynamics, a defense company that otherwise might be a decent place to put some coin in this economy. because gulfstream is going to sell about zero business jets this year.

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Mar 14, 2009
Monument Man:

i havent researched bombardier but the jet market is in a tailspin. BAD BAD stock to pitch IMO. might make it seem like you have not a clue what is happening in the market....

gulfstream is dragging down general dynamics, a defense company that otherwise might be a decent place to put some coin in this economy. because gulfstream is going to sell about zero business jets this year.

This is bad advice. ER isn't about recommending companies that are expanding or growing, but rather finding companies that are undervalued. If you can show that the market is being too pessimistic about this company, then you will get more respect from your interviewers than someone who would have recommended First Solar Energy, because it was the future - even though it was trading at over 100X P/E last year.

Look at Sirius, if you would have bought them last month at $0.05, you could have earned a 700% return by today; and this company is on the brink of bankruptcy. Airlines would be another example; the only reason people invest in these companies is if they think that the stock is being undervalued by the market, because obviously there are no growth opportunities in that industry.

Mar 23, 2009

[/quote]

This is bad advice. ER isn't about recommending companies that are expanding or growing, but rather finding companies that are undervalued. If you can show that the market is being too pessimistic about this company, then you will get more respect from your interviewers than someone who would have recommended First Solar Energy, because it was the future - even though it was trading at over 100X P/E last year.

[/quote]

you're totally right regarding looking for value vs. growth. i still think bombardier is a tough stock to pitch because its just SO easy for an analyst to poke holes in your investment thesis.

if you crunched the #s and you honestly think that they are undervalued, it might be a good one. but to my naked eye this seems like a high risk pitch for an interview

Mar 23, 2009

go with a stock you understand (its fundamentals, ratios, etc.). that's what i did. also consider mentioning macro events (a top down analysis).

Mar 26, 2009

The thing is that they had revenues of $17bn last year, and they have a backlog of over $50bn. Thus, while I recognize that the jet market will take a beating, they can lose almost 2/3 of their backlog (a really high estimation) and still grow and be profitable. Also, only 51% of their business comes from jets (the rest coming from their train division) and I think that the $8bn Obama is putting into high speed rail is really going to benefit the company as it has the most market share and, arguably, the best technology in the industry.

Mar 26, 2009
sisak:

The thing is that they had revenues of $17bn last year, and they have a backlog of over $50bn. Thus, while I recognize that the jet market will take a beating, they can lose almost 2/3 of their backlog (a really high estimation) and still grow and be profitable. Also, only 51% of their business comes from jets (the rest coming from their train division) and I think that the $8bn Obama is putting into high speed rail is really going to benefit the company as it has the most market share and, arguably, the best technology in the industry.

Over what time period is the backlog? I assume that it is several years and not just for 2009. So if they do start losing their backlog it will not be 2/3 before it is back to their revenue. Usually contract for delivery are out for several years and the company does not receive payment until delivery

Mar 26, 2009
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