Cargojet (TSX: CJT) and Bombardier (TSX: BBD): 2 Trending Stocks on TSX This Week 

Summary

• Shares of Cargojet (TSX:CJT) soared by 83 per cent in the last six months.
• Although Bombardier’s (TSX:BBD) stock price hasn’t quite recovered from its March lows, it continues to be in demand among investors.
• Investors often sought out discounted shares that have the likely potential to return good yields in the long run.
• While Cargojet posted healthy financial results of Q2 2020, Bombardier incurred a net loss of US$ 223 million in its second quarter.

The stock market will continue to be susceptible to the COVID-19 pandemic in days to come. With that in mind, some investors are seeking to invest in shares that have fared well in these tumultuous times, like freight airline company Cargojet Inc (TSX: CJT). Others are turning to former top stocks that now come at a low price, like plane and rail manufacturer Bombardier Inc (TSX:BBD). Shares of both these companies have seen heavy volume activities recently. While Bombardier stocks are currently trading under C$ 1, Cargojet’s scrip value has been soaring. Let’s take a close look at these two and understand their stock performance.

Cargojet Inc (TSX: CJT)

Current Stock Price: C$ 181.82

Canada’s top cargo airline service provider Cargojet is one of those companies whose business boomed during the pandemic. As the demand for cargo services increased amid lockdown, its scrips climbed in value at the stock market. Since hitting a low of C$ 71.5 on March 19, its share price shot up by 83 per cent in the last six months. Cargojet is currently one of the top stocks with the largest price gains in the last 30 days. It has a 10-day trading average of 90.3 million.

Commercial passenger flights which carry freight were no longer able to fly after international borders shut down. This gave Cargojet the edge to literally fly solo with cargo deliveries in Canada. The company is currently one of the biggest Boeing 767 operators for e-commerce and other freight.

While most airlines suffered major losses in the wake of the pandemic-led lockdown, Cargojet released a glowing financial second quarter report. The company garnered a total revenue of C$ 196 million in the second quarter of 2020 (ending June 2020), up nearly 65 per cent year-over-year (YoY). Its adjusted EBITDA stood at C$ 91 million in Q2 2020, an impressive 143 per cent YoY increase. It distributes?a quarterly dividend of C$ 0.23 and the current?dividend?yields?stands?at?0.51 per cent. Its price-to-book ratio (P/B) is 12.85 and price-to-cash flow ratio (P/CF) is 12.50.

Cargojet witnessed a massive growth in its stock performance after Amazon (NASDAQ:AMZN) purchased a 9.9 per cent state in the company last year. With the onset of COVID-19, Amazon’s business piqued as online purchase became the need of the hour. This, in turn, boosted Cargojet’s business. Cargojet currently ships over 1.3 million pounds of freight each business night.

Bombardier Inc (TSX:BBD)

Current Stock Price: C$ 0.41

Bombardier, the Montreal-based train and aircraft manufacturer, entered 2020 with a massive debt on its back from the botched CSeries deal. The pandemic added more weight to this burden. During the COVID-led market crash, its share value fell from C$ 1.06 on March 3 to C$ 0.43 on March 24 — a 59 per cent decrease. The company’s second quarter earnings for 2020 reflected a 37 per cent year-over-year (YoY) drop in revenues and a 93 per cent YoY drop in earnings before income and taxes (EBIT). Bombardier also recorded a net loss of US$ 223 million in Q2 2020, up 519 per cent from US$ 36 million in Q2 2019.

To make up for some of its losses, Bombardier exited the commercial jet business, selling off its stake in A220 passenger jet to the parent firm Airbus in February this year. In the same month, French train manufacture Alstom SA acquired its rail equipment production business. Bombardier’s aerostructure division was purchased by Spirit AeroSystems Holdings in 2019 for C$ 1 billion in cash and assumption of overall liabilities.

Under the throes of pandemic, Bombardier has reduced its workforce substantially to cut costs, letting go of nearly 2,500 workers. It also announced the closure of its three-year US $1 billion senior secured term loan in August.

Bombardier Inc’s stock price sank nearly 51 per cent in the last six months. Still, it continues to be in much demand among investors, recording a 30-day trading average of over 4 million. Its market capitalization currently stands at C$ 872 million, and its price-to-book (P/B) and price-to-cash flow (P/CF) are -0.12 and 12.40, respectively.

Bombardier recently delivered its first FLEXITY low-floored tram to Duisburg, Germany. Now dealing only in the production of private business jets, the company presented its first Global 7500 aircraft in August.