With Boeing Co. (NYSE: BA) having now showcased its new 787 Dreamliner, investors might wonder if it is too late to invest. According to three newsletter advisors, there are still upside opportunities. One looks at Boeing itself, one spots value in an aircraft seat and interior designer, and one looks at an aircraft leasing play.
Boeing is a buy for longer-term investors from Bernie Schaeffer, who recommends the shares in his Power Stocks advisory.
Technically, the advisor notes that Boeing recently broke out after a lengthy sideways consolidation. From mid-November 2006 to the middle of last month, he points out that the stock traded in a narrow range between $85 and $92. He explains, "Such long periods of sideways movement can be followed by extended trends."
That level, he now says, should hold as support and should serve as a "foundation for higher prices." Further, he adds, the stock's rise above $100 is "psychologically significant" and should offer additional support for the stock.
The contrarian advisor notes, "Even with the strong fundamental and technical backdrop, Wall Street remains fairly pessimistic. According to Zacks, nine of the 18 analysts rate the stock a 'hold' or worse and three of those have a 'strong sell' rating on it. Any upgrades or upward price target revisions from this skeptical crowd could boost the stock."
Meanwhile, he maintains a target price for the stock is $127 a share. In addition to investing in Boeing itself, there are two ancillary companies that couldl benefit from the success of the Dreamliner.
Quantitative analyst Vahan Janjigian -- editor of The Forbes Growth Investor -- sees upside BE Aerospace (NASDAQ: BEAV), a leading manufacturer of airline seats and interiors.
He explains, "BE Aerospace depends on the good health of the airline and business jet industries, which are impacted by many factors including fuel costs and price competition. Based on its healthy backlog and strong order activity, BEAV should report excellent results for several quarters."
He adds that the company will benefit as carriers refurbish existing fleets and upgrade to newer wide-body planes such as the Boeing 777 and 787, and the Airbus A380. He observes, "These planes accommodate many more seats than traditional aircraft, which translates into a lot more business for BEAV."
For those interested in income, Harry Domash looks at Aircastle (NYSE: AYR), which acquires and leases commercial jet aircraft to passenger and cargo airlines. In his Winning Investing newsletter, he notes, "Despite problems in the U.S., globally, the airline business is booming and Airbus and Boeing have full order books out to 2011."
Although founded in October 2004, he notes that Aircastle only went public in August 2006. Currently, he says, Aircastle already owns or has committed to acquire more than 115 aircraft that it leases to 50 different airlines in 29 countries. According to Domash, Aircastle is expected to grow its fleet by 18% or so annually for at least the next two years.
For investors, he explains, "Aircastle said it intends to pay out 100% of its net income to shareholders. Aircastle reported March quarter earning from continuing operations of $0.35 per share, up 94% from year ago. Revenues rose 123% to $70 million. Cash available to pay dividends totaled $0.58 per share."
Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.
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