A couple weeks ago, I received the following mail from a long-time reader who is an investment pro in Canada.

"Hi Bill, Just some simple observations;;.

There are two situations developing that can develop "story stock" buzz that may cause a pop in price in the coming weeks;;;

One is Bombardier, which I follow closely. I have been tracking Canadian aerospace (BBD.b & CAE) for years -- from the time I held both when they traded in the 10 " 15 dollar range. BBD has suffered because of obvious profitability and weak market problems, but also because it is traded in European markets where short-selling programs are non-regulated. I have been amazed how there are almost daily large orders for train-sets and jets being reported in their PR, and their order book must be at a record high. They have also developed an initiative into train maintenance programs. This reminds me of how IBM successfully moved from hardware to consulting services as the primary income generator; and, as I see it, the potential for BBD here is enormous. The $CDN has dropped from its recent highs. The market has responded only to raise the BBD.b price from mid-$2 to mid-$3. I expect it to spike quickly to $7-to-10 when substantial earnings improvements are reported as the result of these developments over the past 3 months or so. IMO the BBD situation has reversed completely and there will be a big story here.

Second, the market is fairly strong on commodities, but generally negative on Aluminum producers. Prices for AA and AL have come back down to where they were before the commodities rally. A recent big merger of Russian and European producers makes that one the biggest and lowest-cost entity. So, there will inevitably be stories and speculation about an AA/AL merger. Also, both are huge suppliers of hydro-electric power when production is lowered due to weak market conditions. AL sells BC-produced power at Kitimat to the California power grid and elsewhere, for example. Co-incidentally, it is my knowledge from managers within BBD that the company has switched from stainless steel to aluminum used in bodies of subway and commuter cars.

So, as the price becomes, or is in the case of BBD, attractive " you have an opportunity to be ahead of the curve by pointing out these situations after applying appropriate research."

Then he followed up with a letter yesterday:

"Bill, Re my note of Oct 12th, I am seeing the other day that a bond rating agency lowered their rating on BBD (credit watch etc.) because the company is about to re-finance their debt. The agency is concerned that the company may leverage themselves too heavily. So the stock came off in heavy trading, before popping to over $4. Then negative news yesterday about layoffs in their small jet operations, pushed the stock down 30 cents in a few hours. What a pile of ****! This stock is in play, trading in much larger volume than the recent 2 or 3 years, and the short sellers are getting squeezed. I just read that the order book is over $25 billion and today they announced a plus $multi-billion order from France for commuter train sets and a piece of the Paris Metro rolling stock. Their recent win of the Toronto subway cars ($600M) never even got in the press. They are also doing the re-financing and the Canadian layoffs to clear the floor for the new C-class regional jets (about 150 seats) they stalled on building earlier this year. I expect an announcement in a few weeks that they are going ahead with these jets along with announcing big earnings and at this time there will be the big price spike."

And yesterday, one of Canada's leading investment strategists, Desjardins Securities vice-chairman Peter Gibson, had this to say about the company, with notes from Financial Post journalist Sonita Horvitch:

"Bombardier is a "speculative, high-risk stock; it is a long-term turnaround". The Montreal-based aerospace manufacturer, once a favoured growth stock in the Canadian equity market, had fallen from grace (I should add that Brazil's Embraer " a Cara 100 company [ERJ] " was eating its lunch), Gibson notes. But Bombardier "has been showing slow, but steady improvement in its profitability over the past few years". This is the result of both margin improvement and volume growth, he says, which indicates that this growth is likely to be sustainable".

Peter Gibson, by the way, runs a research team that is institutionally ranked number one in strategy and quantitative research, and Peter himself has "been accorded top billing (by an international ranking agency) for the past 18 years". Kudos.

With respect to Bombardier, I think my reader has it right. The company is quickly returning to its former glory and new money is presently squeezing the life out of the shorts in the stock. I say, pile on. Blue sky ahead.

The Bombardier stock is one of those multi-vote MV (class A) and single-vote SV (class B) share issues that I hate. Moreover, the Toronto Stock Exchange in their continuing journey to destroy trader efficiency has bastardized the ticker symbols once again. It's not so bad that the TSX has the absolute worst website on earth, and that they trashed the excellent Vancouver Exchange site after buying out that exchange and turning it into the Toronto Venture Exchange, but they continue to screw with ticker symbols, which makes following charts virtually impossible.

For all that I give the TSX management the Cara 2006 Dubious Feat Award.

In any event, Bombardier file a 12g with the SEC, so their stock also trades in the U.S. Here is the Yahoo ticker search. As I say, some work and the rest you can blame on the TSX.

Remember; Bombardier has a lot of blue sky ahead. BBD.B.TO C$3.93. Spend a little time on their website. Enjoy the flight.

ADDENDUM:

"Wayne" has pointed me to an excellent media tracking service where you can discover the most recent comments by industry analysts on stocks like Bombardier. He says: "Simply go to http://www.stockchase.com/index.php and type in BBD.B-T in the ticker symbol field". Thanks Wayne.

Remember, however, that many of these comments are made on TV phone-in shows where the guest analyst is unprepared for the query, and often gives an off-the-cuff response. At ROBTV, for instance, any of the guests are outstanding in their jobs, but they haven't the research at hand to be able to give an in-depth reply to the caller. One who does is Bob McWhirter, who is a money manager I once worked with at Dominion Securities Investment Managemet, and he's excellent. He also brings his research summaries to the TV studio, where the questions are selected from those stocks he covers. The way he does this is an excellent model for other guests. I have often wondered why they all don't do it. Frankly, we all can't have an astounding memory like CNBC's Jim Cramer. I wish we did.

As "superreturns" has informed us, the charts can be found here, as they can for all Toronto listed companies.