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Boeing (NYSE:BA) is a good company, but now is not the time to buy it. It's not because of the ongoing Dreamliner drama. It's not because of the rumored labor troubles.

It's because of the sequester.

Strange that we've sort of forgotten why the economy contracted in the last quarter. It wasn't the sequester per se, but the military's reaction to it. Faced with a need to maintain its mission despite a coming drop in revenue, military planners prioritized immediate readiness for longer-term equipment needs. They moved money around, and the place they moved away from was contracting.

In other words, companies like Boeing.

Boeing is now the second-largest defense contractor, trailing only Lockheed Martin (NYSE:LMT), which fell hard starting in mid-January and is now down almost 15%. That's a tell. Boeing's armament sales came to over $31 billion in 2011, out of a total of $68 billion in total revenues.

This is high-margin business. The costs are in the front of the contract, the sales process. Once the deal is done, all that -- and more -- gets recouped. While military sales did represent less than half of 2012's $81 billion in revenue, it may well have represented a lot more than half the $6.3 billion in reported operating income. Basically, Boeing was reinvesting a lot of its profits from the government into the Dreamliner.

The planning process didn't suddenly stop when the January sequester was cancelled. Doubtless it continues, and the priorities are now known. If March comes and the sequester happens, Boeing is going to be hit.

While it's very likely that investors have discounted the Dreamliner's ongoing battery problems, and are rightly ignoring the labor threats in a high unemployment environment, it's very possible that they're ignoring the political shenanigans going on in Washington. What most observers there expect to happen, what they've been told to expect by the Republican leadership, is that the sequester will start and then be pulled back later in the month.

In other words, the military has to assume the cuts until the cuts are rescinded, and start implementing them until that time. We know the priorities, so we know who is going to be hurt.

Even after the cuts are restored, this drama will eventually emphasize to investors the vulnerability of Boeing's position as a leading military contractor. My guess is that drama will be overdone. But it would be wise to wait, if you want to go long, until the drama is in full swing.

Don't buy until the fat generals sing and it's heard on the street.

Source: Boeing Turbulence Should Tell Investors To Wait