Bombardier Inc. (TSX:BBD.B) is now trading at lows not seen for more than two decades, and some contrarian investors are looking at the massive sell-off as a good opportunity to pick up the stock.

Let’s take a look at the current situation to see if there might be some solid returns on the horizon.

CSeries troubles

Much of the decline over the past year is attributable to ongoing difficulties with the company’s CSeries jet program.

In 2011 Bombardier told investors it would have 300 firm orders for the new jets by the time the planes were ready to go into commercial service, which was expected to be in 2013. The market had good reason to trust the statement because the company already had customer commitments for 90 planes.

Four years later the project is still struggling to get off the ground and the budget has ballooned by more than $2 billion.

The more concerning fact for investors might be the industry’s apparent lack of interest in the planes. Bombardier has 243 firm orders, but the company hasn’t signed up a new customer since last September.

China Eastern Airlines is considered as a possible buyer for a significant number of CSeries planes, but Boeing just snagged a 50-airplane order from the Chinese company, and some analysts say the deal will greatly reduce the likelihood of a near-term purchase of the CSeries.

Business jet troubles

Bombardier is facing difficulties in other areas of it aerospace unit. Earlier this year the company suspended production of its Learjet 85 in order to focus on its highly anticipated Global 7000 and 8000 business jet program.

On July 10 Bombardier announced it is “conducting a full review of all aspects” of the program, including its schedule.

The long-range business jets are supposed to be the bright spot in the aerospace division and the most profitable group in the company. The 7000 is expected to be ready in 2016 and the 8000 a year later. Investors are now concerned those dates are also at risk.

Rail threats

Bombardier’s transport group tends to be the bread and butter of the business and has carried the company through the rough patch encountered in recent years, but it too is facing some turbulence.

The company is looking at options to sell part of the transport group as a way to strengthen its balance sheet. Rumours have bounced around in recent months that China’s state-owned CRRC Corp. is interested in buying all or part of Bombardier’s rail division.

That’s unlikely to happen.

CRRC is the product of the recent merger of China’s two largest train makers, CSR Corp. and China CNR Corp. The Chinese are on a huge mission to grab global market share and have set their sights on the U.S., where Bombardier has traditionally done very well.

Late last year China CNR won a US$567 million contract to supply trains to Boston’s transit system. Bombardier has a great product, but it simply doesn’t have the financial firepower to defend its position against a state-owned foreign company that can afford to take losses to get a foothold in the U.S. market. If other American cities decide to follow Boston’s lead, Bombardier could be in trouble.

The Chinese recently stated they are not interested in purchasing Bombardier’s rail division and it’s uncertain whether a deal would even be allowed by the Canadian government.

Will Bombardier double?

Any good news at this point could give the stock a boost, but the name still carries a lot of risk.

Bombardier currently trades for less than $2 per share. A run toward $4 by the end of the year would require a big CSeries order, confirmation that the business jets are still on schedule, and a strong sale price for part of the transport division.

At the moment, there is no indication that any of those scenarios are in the cards.

The company is sitting on a mountain of debt and time is running out. Any bet on the stock at this point should be considered highly speculative, and investors might want to keep the position small until there is strong evidence of a turnaround.

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Fool contributor Andrew Walker has no position in any stocks mentioned.