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Gold/Mining/Energy : Bombardier, maker of planes and trains and other things -- Ignore unavailable to you. Want to Upgrade?

To: Hank Stamper who wrote (937)	11/1/2001 3:26:45 PM
From: CIMA	Respond to of 1177

Tumultuous trading day for Bombardier Aerospace sector concerns spark selloff Caroline Alphonso 00:00 EST Thursday, November 01, 2001 Transportation giant Bombardier Inc.'s stock declined sharply on heavy volume yesterday amid general concerns about the outlook for the aerospace industry, but snapped back by the end of the day. Some analysts suggested that U.S. institutions were taking Bombardier off their books. Toward the end of the day, however, there was some short covering that helped push the price back up. At the same time, Canadian bargain hunters were moving in to snap up the stock at what they considered a good price, a source said. The Montreal-based train and plane maker's stock fell as low as $9.19 during the day before rebounding. The stock closed at $10.30, up 16 cents, with 1,159,900 shares trading hands, making it the heaviest trader on the Toronto Stock Exchange. "I think the current expectations that were out there and continue to be out there as to the 15-per-cent growth in earnings are going to be challenging," said analyst Robert Fay of Canaccord Capital Corp. "Unfortunately, the industry right now . . . is kind of difficult to be in." Bombardier has seen its stock lose more than 49 per cent of its value since the Sept. 11 terrorist attacks in the United States, which caused cash-strapped airlines to cut orders for new planes. Bombardier's orders for products, such as its Global Express business jet, are getting a bit thin, Mr. Fay said. Last month, chief executive officer Robert Brown announced that Bombardier was slowing production and laying off 3,800 workers worldwide. "I believe the industry is going to be struggling certainly through the winter months with the major airlines and the cash flow situation," Mr. Fay said. Andreas Hoppe of BMO Nesbitt Burns Inc. agrees, adding that any upturn in the aerospace industry will depend on a positive outlook for airline profitability. He believes Bombardier's stock is now trading at the low end of a range. Some market watchers, such as Gerald Vincent, vice-president at Toronto-based money manager Davis-Rea Ltd., said any drop in the stock price is an entry point for investors. Yesterday's stock price action was "completely panic selling," Mr. Vincent added. In a statement yesterday evening, Bombardier said it is not aware of any factors that could explain the recent sharp drop in its share price. The company reiterated it will post positive operating results for this fiscal year and maintained its earnings growth target of 15 per cent per share before special items. Ron Schwarz, an analyst with CIBC World Markets Inc., said that although the stock is beginning to look more attractive at present levels from a "risk-return perspective," it will remain volatile. Mr. Schwarz has a "hold" recommendation on the stock, with a 12-month target price of $13. "We believe continued uncertainty about aircraft financing will remain in the near-term spotlight," he wrote in a note to clients. Copyright © 2001 The Globe and Mail