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Embraer: A Special Combination Of Value And Growth
Summary
- Currently trading at book value, Embraer offers limited downside but enormous upside.
- Investors are skeptical of Embraer's commercial aviation segment, but as a leading vendor of planes suited for emerging markets where aviation is expanding, Embraer is positioned for secular growth.
- Recent new-plane orders, and a growing list of airlines with stated interest in ordering more commercial planes have improved Embraer's near-term prospects.
- In addition to the value of its established business segments, Embraer's innovation wing, EmbraerX, and particularly its EVE (eVOTL) subsidiary, represent huge value not reflected in Embraer's current valuation.
The Old Firm is a private investor and trial lawyer who has been successfully using a value investment approach for the last decade, and is here sharing some of his analysis and thoughts. No investment advice.
Analyst’s Disclosure:I am/we are long ERJ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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