Can Boeing (BA) continue its steady rise?
I first recommended Boeing when the stock was 62 dollars a share back in November 2011.
Since then the stock is up 12% to the $75 range. Recently Boeing has been seen as over priced by the media and specifically MSN Money stock picker Jim Jubak. In short the actual news and events surrounding Boeing far outweigh Jubak's reasoning.
In Jubak's article he claims the production delays in the 787 and possible defense cuts will have a long-term negative effect on Boeing. Boeing's problems with the 787 are well documented and I feel they are correctly priced into the stock.
The reason the stock is up is due to Boeing winning market share from Airbus (EADS.PK) and other orders in many of their markets. Since my article in November the news for Boeing has been even more positive.
January 13, 2011: PM Boeing subsidiary Boeing Satellite Systems has been awarded a $376.52M contract for the modification of the Wideband Global SATCOM Block II follow-on contract.
January 5, 2011: Boeing reports an order for 25 of its 787 Dreamliner planes, pushing orders for 2011 into positive territory after cancellations were recorded earlier in the year.
December 30, 2011: Boeing beats out Lockheed Martin (LMT) to land a $3.5B missile defense contract, according to a Bloomberg report.
December 29, 2011: A $29B weapons purchase deal between Saudia Arabia and the U.S. includes the purchase of 84 new Boeing fighter jets and an upgrade to 70 of its existing F-15s. The Pentagon says the first new planes will be delivered to Saudi Arabia in 2014.
December 27, 2011: Boeing lands a firm order from Russia's Transaero Airlines for four 787 Dreamliners that will be used to upgrade the carrier's fleet.
December 22, 2011: CNBC reports that a bankruptcy judge has approved the purchase of 200 Boeing aircraft by American Airlines (AMR). During the hearing, an attorney for AMR informed the judge that the carrier hasn't seen a noticeable dropoff in passengers since its filing.
December 13, 2011: Southwest Airlines (LUV) announces it placed an order with Boeing valued at nearly $19B to buy 150 of its 737 MAX airplanes and an additional 58 737s, bringing up its total firm orders with the company to 350 for 2012 through 2022. The carrier becomes the first customer of Boeing to finalize an order for the fuel-efficient 737s.
Each of these news stories gave Boeing a bump. Taken as a whole I believe the stock has not risen enough. In its article January 9, Dividend Kings spelled out the reasons for its $108 price target.
I heartly agree. Everybody should consider Boeing before the market price catches up to the actual value.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in BA over the next 72 hours.
Disclaimer: The above is not to be considered investing or accounting advice.