Fool Canada’s first 1,000%+ winner?

Our Chief Investment Advisor, Iain Butler, and a team of The Motley Fool’s most talented investors from across the globe recently embarked on an unprecedented mission:

To identify the 20 Canadian small-cap companies they believe have the best shot at earning investors like you gains of 1,000%+ over the coming years.

For the next few days only, you can get the names and full details on these 20 potential “10-baggers” when you join Iain and his team in a first-of-its-kind project they have dubbed Discovery Canada 2017.

Bombardier, Inc. Sells 30% of its Train Unit: Is it Time to Buy?

So much for the US$8 billion valuation the market had hoped Bombardier, Inc. (TSX:BBD.B) could get for its rail transport division.

Quebec’s provincial pension fund, Caisse du Depot & Placement du Quebec (CDPQ) has agreed to give Bombardier US$1.5 billion for a 30% stake in a new holding company being set up that will contain the asset of the Bombardier Transport division.

The much-needed funds come on the heels of a $1 billion lifeline handed to Bombardier by the Quebec government, giving the beleaguered Canadian icon the cash it needs to complete its CSeries jet program.

Investors should have mixed feelings about the deal. One the one hand, a cash crisis has now been averted and Bombardier can focus all of its efforts on getting the CSeries certified and into production.

On the other hand, the valuation of Bombardier Transport is now pegged much lower than a Reuters report suggested when the news agency ran a story saying a state-owned Chinese company had considered buying the rail division for as much as US$8 billion.

Is this a good deal?

Keeping jobs in Quebec is the primary focus of the recent moves by the Quebec government and the pension fund. The company employs about 18,000 people in Quebec at an average salary that is double the mean for the province.

CDPQ will acquire convertible shares in the new company, so the investment could turn out to be a winner for Quebec’s public servants if Bombardier can manage to survive.

The pension fund has the right to force an IPO of the new company, BT Holdco, after five years. A sale of the stock could also be triggered if ownership of Bombardier changes.

The US$5 billion valuation comes in at the low end of analyst expectations, but the fact that the money came from CDPQ will probably be viewed positively.

Should you buy Bombardier?

The cash crunch has now been addressed, but the problems that created the crisis are still there.

Bombardier hasn’t sold a new CSeries jet in more than a year, and one report suggests as many as 100 of the 243 orders for the planes could be delayed or never delivered.

The CSeries was pitched as a quieter and more fuel-efficient option to planes that are currently in the market. When WTI oil prices sat above $100 per barrel, fuel efficiency was a big selling point. Now jet-fuel costs have dropped significantly and airlines around the world are choosing to buy or lease older models instead of paying up for the new Bombardier jets.

In a recent statement, CEO Alain Bellemare said the troubled CSeries jet program wouldn’t be profitable until at least 2020.

The train division that CDPQ just bought into has its own issues to work out. The group is struggling to meet delivery targets on key contracts, and Chinese competitors are aggressively targeting the North American rail market.

If you have a contrarian investing style and think Bombardier is capable of turning things around, you might want to start a small position in the stock.

I would stay on the sidelines until the first CSeries jets get delivered.

Our TOP turnaround stock for the rest of 2015?

Bombardier might be on the mend, but one other beaten-up Canadian icon looks like a better bet right now.

If you're a curious soul (like me), then you can download the name, ticker symbol, and price guidance absolutely FREE.

Simply click here to receive your Special FREE Report, "A Top Turnaround Stock Idea for the Rest of 2015."

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

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to find out how you can claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.