Many stocks have managed to record significant gains in recent months and one that often flies under the radar is Bombardier, Inc. Class B (OTCMKTS:BDRBF) stock.
The stock has performed impressively over the course of the past two months and during that period recorded gains of as much as 120%. In such a situation, it is important for investors to look into some of the major triggers that led to such gains.
An important trigger came about towards the end of January when it emerged that the company was going to get export funding worth as much as $2.3 billion from the British government before a merger involving its train arm.
The merger in question is the one between Bombardier Rail Inc and the French firm Alstrom SA. As soon as the news emerged regarding the export funding, Bombardier, Inc. Class B (OTCMKTS:BDRBF) rallied strongly and it was understandable considering the significance of the export funding assistance.
The funding from the government is going to be deployed towards its plant situated in Derby, England.
The investment into the plant is important since Bombardier recently landed a contract worth as much as 2.4 billion Euros for manufacturing trains which are meant for monorails in the capital of Egypt, Cairo.
The cash injection is expected to support as many as 100 jobs as a direct consequence. The initiative from the British government is part of its broader initiative to build trading activities all across the globe following Brexit. One of the beneficiaries of the scheme from the government seems to be Bombardier Transportation, which operates from Berlin.
The merger with Alstrom is also expected to come as a major boost for the company. The merged entity is going to be between two of the three biggest train manufacturers in Europe and hence, it is going to create a company that is going to have a considerable market share.
Disclaimer: We hold no shares in BDRBF stock.