Why Air Canada & Bombardier are among most active stocks on the TSX?

Summary

• In November, Bombardier shares made an impressive recovery of about 89 per cent.
• Bombardier scrips rebounded by over 5 per cent in the last six months and by almost 25 per cent in the last three months.
• Air Canada announced late in November that it would be expanding its cargo airline business and use a number of its retired Boeing 767 aircraft to carry freight shipment.
• In December so far, Air Canada shares registered a growth of about 10 per cent.

Stocks of Canadian airline Air Canada (TSX: AC) and transportation equipment maker Bombardier Inc (TSX: BBD.B) have been sailing among shares with high trading volume on the TSX for a while now. The value of these once-mighty stocks depreciated to new lows amid the pandemic, allowing investors to lap them up in discounted prices.

The jump in the trading activities of these industrial stocks also came on the heels of the progress of pharmaceutical companies in the pursuit of COVID-19 vaccines. Many riskier stocks noted a spike in their demand after Pfizer-BioNTech and Moderna announced their results of their successful trials in early November. Traders shifted to these stocks with hopes of gaining returns as the world and markets returns to their pre-COVID levels.

Let’s take a closer look at Air Canada and Bombardier to understand their performances.

Bombardier Inc (TSX: BBD.B)

Current Stock Price: C$ 0.385

Bombardier Transportation is expected to deliver 112 CR300AF high-speed train cars by January next year to the China State Railway Group Co for its US$ 248-million joint venture contract.

Bombardier’s aerostructure segment has already been bought off by US-based Spirit AeroSystems Holding Inc (NYSE: SPR). Meanwhile, its transportation business is expected to be handed over to French buyer Alstom SA as the deal finally closes in the first quarter of 2021, the company said.

Once this deal goes through, Bombardier Inc will be dealing solely in the manufacture of business aircraft.

bombardier inc stock performance

Stocks of Bombardier Inc are down by 74 per cent this year. But after having suffered acutely due to the coronavirus pandemic, Bombardier scrips rebounded by over 5 per cent in the last six months and by almost 25 per cent in the last three months.

In November, Bombardier shares made an impressive recovery of about 89 per cent.

The stocks saw increased trading through the coronavirus pandemic. In the last 10 days, Bombardier collected an average share movement volume of 14.3 million.

BOMBARDIER INC Q3 2020 RESULTS

Bombardier Inc’s total revenues for the third quarter ending 30 September 2020 stood at US$ 3.5 billion, a five per cent decrease year-over-year. On the other hand, the company’s business aircraft manufacturing revenues of amounting to US$ 1.4 billion, jumped 20 per cent YoY in Q3 2020.

Its adjusted EBITDA totaled to US$ 176 million in the third quarter.

Bombardier’s free cash flow usage stood at US$ 0.7 billion as of 30 September 2020, while its operating cash flow usage was US$ 0.6 billion. Cash on hand stood at US$ 1.9 billion at the end of the quarter for Bombardier.

Air Canada (TSX: AC)

Current Stock Price: C$ 21.01

As air travel was suspended around the world to staunch the spread of the coronavirus this year, the aviation industry was among the worst-hit sectors. Canada’s top commercial airline Air Canada saw its stocks collapse by 44 per cent this year.

However, the scrips shot up about 48 per cent in the last six months and by almost 52 per cent in the last three months.

In December so far, Air Canada shares registered a growth of about 10 per cent.

The airline accumulated a share trading volume of 7.47 million in the last 10 days and of 6.78 million in the past month.

Air Canada announced late in November that it would be expanding its cargo airline business and use a number of its retired Boeing 767 aircraft to carry freight shipment.

AIR CANADA Q3 2020 RESULTS

The Canadian carrier’s total revenue of C$ 757 million sank about 86 per cent YoY in the third quarter of 2020. Air Canada reported an EBITDA of C$ 554 million, and an operating loss of about C$ 785 million in Q3 2020 as well.

Total revenue passengers carried in Q3 ending 30 September 2020 doffed 88 per cent YoY for Air Canada. Its unrestricted liquidity stood at C$ 8.189 billion at the end of the latest quarter

The airline said that it raised approximately C$ 6 billion in additional liquidity since March. Owing to the pandemic, Air Canada had to resort to downsizing its workforce by about 20,000 jobs and reduce its capacity by over 80 per cent this year.