A humorous look at the companies that caught our eye, for better or worse, this week.
Bombardier
BBD.B (TSX)
Jan. 16, 2015 close: $2.89
down $1.03 or 26.3% over week
Reasons to continue investing in Bombardier:
1) You are a masochist;
2) You are in a cave with no telephone or Internet access and can’t access your brokerage account;
3) You have taken a large dose of Valium and can’t get up.
The plane and train maker – which slumped 33 per cent last year – is off to a dismal start in 2015 after suspending its Learjet 85 business aircraft and warning that 2014 cash flow will be well below estimates.
Magna Int'l
MG (TSX)
Jan. 16, 2015 close: $111.62
down $15.10 or 11.9% over week
After redlining it for the past three years, Magna’s stock was bound to end up in the repair shop. Reflecting a combination of factors – including currency volatility, a temporary shutdown of the Fiat Chrysler minivan plant in Windsor, Ont., and reduced production at a Magna assembly plant in Steyr, Austria – the auto parts giant said revenue in 2015 will be below 2014 levels. With profit poised to take a hit, investors are stuck with the repair bill.
Tesla Motors
TSLA (Nasdaq)
Jan. 16, 2015 close: $193.07 (U.S.)
down $13.59 or 6.6% over week
Tesla is going to turn a profit. That’s the good news. The bad news? It won’t happen until 2020, according to CEO Elon Musk. Shares of the electric car maker skidded on the disappointing forecast – investors had hoped Tesla would be in the black years earlier – while soft sales in China, where consumers worry that there aren’t enough charging stations, added to the gloom. Cheap gasoline can’t be doing Tesla any favours, either.
Caesars Entertainment
CZR (Nasdaq)
Jan. 16, 2015 close: $11.83 (U.S.)
down $2.00 or 14.5% over week
For years, casinos have been bankrupting people. Now, Caesars Entertainment has bankrupted itself. Weighed down by massive debt from a 2008 leveraged buyout, the company’s main operating unit – which owns Caesars Palace in Las Vegas – filed for Chapter 11 bankruptcy protection with plans to slash $10-billion of its $18.4-billion debt load. Sometimes, the house loses.
Bebe Stores
BEBE (Nasdaq)
Jan. 16, 2015 close: $3.09 (U.S.)
up 72¢ or 30.4% over week
Multiple choice quiz!
U.S.-based Bebe Stores sells:
a) bibs, pacifiers and other baby accessories imported from France;
b) babies;
c) women’s clothing.
Answer: c.
The shares were looking fashionable indeed after the company, which operates stores in the U.S., Canada, Puerto Rico and the U.S. Virgin Islands, posted same-store sales growth of 8 per cent in the fiscal second quarter ended Jan. 3. Hey Bebe!