We think these trends will continue
at least through 2016, albeit with
oil and gas comparisons eventually
(hopefully) stabilizing.
So what/where are the silver linings
when the entire machinery sector, ex
trucking, is getting whacked?
-
Low commodity prices enable
demand. Nothing big is happening
now. But infrastructure soaks a lot
of energy and materials; funding
improvements is easier after an
election (hopefully) and with
lower input costs. The set-up is for
early ’17 bills getting passed with
funding (President-elect’s brief
“honeymoon”), and rising activity in
2018.
-
Improving home prices support
continued residential optimism.
You (not me) will be happy to know
that, for example, my village has
just proposed a 20 percent increase
in my tax assessment. THAT isn’t
going to happen, but the direction
remains up.
-
U.S. economic growth continues,
despite headwinds from lower
energy and the strong U.S. dollar.
-
Aerospace and auto market
conditions should remain strong.
In a nutshell, weathering the continuing
low commodity price storm
(energy, mining, agriculture) will remain
your number one priority — but
with pockets of potential — as above.
Focus Company: Bombardier
(BBD.B)
Bombardier operates in two business
segments: Commercial Aviation
and Rail. This company matters to you
if you supply engine components or related
systems to Pratt & Whitney on its
geared turbo fan (GTF) engine slated
to launch on the significantly delayed
C-Series jet.
That chart looks…awful. The company
is over two years late on C-Series
entry into service (hoping for certification
in November), which has cost
orders, replaced senior management,
and is currently running around seeking
cash so they can ensure getting aircraft
into commercial production.
If you are a supplier on the GTF engine,
this appears worrisome, but take
heart — the GTF is extremely important
to United Technologies (owner of
Pratt & Whitney) and the AOFUTXEWSF
(Association of Former UTX Executives
Who Speak French) has taken
over at Bombardier. They will get it into
the air.
Further your career: On July 1, 2015
I took over as Chair (and Lecturer) of
Graduate Business Programs at Aurora
University. The Dunham Graduate
School of Business MBA with a Leadership
concentration is ideally suited for
technical or engineering professionals
seeking to gain the business skills,
tools, and mentorship to further their
careers. AU also offers adult degree
completion programs.
- Highly accomplished, professional
business people teach our courses,
whether on ground or online (same
professors).
- Front-end career goal discussion
and mentorship. We want you to
succeed.
- Rolling admission with six 8-week
terms per year allows you to flex up/
down, depending upon your needs.
- Focused curriculum: 12
classes — seven core, five electives.
Each core class is a basic, needed
building block; the electives are
geared for your objectives.
- Locations: Aurora, Illinois,
Woodstock, IL and Online.
Contact blangenberg@aurora.edu to
arrange for a phone or in-person discussion.
About Author
Brian K. Langenberg, CFA
has earned recognition as a
member of the Institutional
Investor All-America
Research Team, a Wall
Street Journal All-Star, and
Starmine Best on the Street.
As Principal of Langenberg
& Company, he advises CEOs
and senior executives on strategy and capital
markets, and makes numerous public speaking
appearances. In July 2015 he was named Chair
(and Lecturer)of Graduate Business Programs at Aurora University.
