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TMFTmonie (< 20)

Boeing should be a good Long-term Investment

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July 11, 2008 – Comments (2) | RELATED TICKERS: NOC

I think the market's reaction to Boeing (NYSE: BA) has been unfair. Granted that Boeing like EADS has encountered some supply chain issues that have caused delays in the delivery of planes. Lets be honest those two companies are the only game in town when it comes to large commerical jets. Out of the two, I believe Boeing has taken the wise approach of building a more fuel efficent 787 plane instead of the gigantic Airbus 380 that would require changes to runways at many of the airports in Asia. Additionally, Boeing also has a major role in the Defense industry. With the opening of the bidding process for KC Tanker once again, Boeing is in a good position to land a multi-billion dollar contract. In a way I am glad that Boeing is now down to near $63. It represents a great buying opportunity for me.

2 Comments – Post Your Own

#1) On July 11, 2008 at 3:31 PM, WillSurfForFood (81.22) wrote:

Building the more fuel efficient 787 was indeed the better plan but I still don't like anything associated with the commercial airline industry. I think the industry is about to experience shrinkage and the effects haven't yet started to affect Boeing.

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#2) On July 11, 2008 at 10:31 PM, Imperial1964 (97.75) wrote:

I'm no BA expert, but I've got a couple of concerns with them:

1) US airlines are going broke as usual.

2) There isn't much defense-related projects in Boeing's pipeline.

3) What else do they sell a lot of besides 787s?  I'd be afraid to buy them based on earnings when such a large portion comes from one product line.

They traded under $30 a little over 3 years ago.  I sold my shares at over $106.  (by luck, at a higher price than BA has ever closed)  $63 sounds a lot more reasonable, but it doesn't afford me the margin of safety that I want when I buy in.

I'm just playing devil's advocate.  They could be a great investment.  But with some of my doubts, they're just not trading at a price where I feel I can't lose.

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