"Although Boeing Co. (NYSE: BA) has had a tremendous run, I'm still a believer," says Glenn Rogers, contributing editor to Gordon Pape's Internet Wealth Builder.
He explains, "Given the crazy markets we are experiencing, I believe Boeing has some defensive qualities that should prove helpful while we wait to see whether we have a recession on the near-term horizon.
"For some time, the upstart European consortium that produces Airbus was kicking Boeing's behind and carving deeply into the U.S. company's market share. Things looked bleak for a number of years.
"Then, someone had the bright idea to launch the 787 Dreamliner, a sleek, fuel-efficient plane that seems perfectly designed for the global warming world of the 21st century.
"Airbus, on the other hand, decided that bigger was better and placed its bets on a Superjumbo jet, the A380. It's a double-deck behemoth that can cram as many as 853 passengers into an all-economy configuration.
"The A380 is so enormous that airports would need to be altered so passengers could get on and off. Needless to say, the airline industry is balking and Airbus could have an economic disaster of Concorde proportions on its hands.
"Boeing's Dreamliner is a revolutionary aircraft that will be made from new light-weight composites which will reduce weight and improve fuel efficiency. The plane also offers a greatly improved customer experience with larger windows, wider aisles, more on-board storage, higher humidity, etc.
"The Dreamliner will carry between 210 and 330 passengers on distances up to 15,750 kilometres, depending on the configuration. Boeing says it will use 20% less fuel than comparably-sized planes
"As you have probably heard, the plane was an instant hit. So far, it has generated over 700 firm orders (including 14 from Air Canada) and there is already a backlog of several years.
"This backlog translates into over $279 billion dollars in sales and counting for this plane alone. Boeing's other models are also doing well but it's the Dreamliner that every airline has to have, otherwise their competitors will eat them alive.
"In addition, the firm's Integrated Defense Systems provides a broad range of services to the U.S. military machine. It is also engaged in space shuttle production, and lots of other high-tech classified equipment, much of which is of the hush-hush variety.
"Boeing recently raised its 2007 outlook across the board after the last quarter came in 27% higher than the same period last year. The company pays a dividend of $1.40 a year and is priced at a forward P/E ratio of 16.5.
"The Dreamliner is the main reason (but not the only one) that I like Boeing despite the price run-up, especially now given the turbulent markets that lie ahead. Boeing's share price may pull back but the company is not going away and you should see the stock over $120 over the next 12 months."
Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.
See all the posts in this special report:
- Volatile Markets: 11 stock plays for turbulent times
- Volatile Markets: Stick with General Electric (GE)
- Volatile Markets: Huaneng Power (HNP) is my pick for the next 50 years
- Volatile Markets: Target (TGT) is the retailer of choice
- Volatile Markets: Bank of America (BAC) offers low risk, high reward
- Volatile Markets: Starbucks (SBUX) is ready for a comeback
- Volatile Markets: Coca-Cola (KO) is the Real Thing
- Volatile Markets: Bet on Boeing (BA)
- Volatile Markets: Ride FreightCar America (RAIL)
- Volatile Markets: Anadarko Petroleum (APC) has valuable fuel reserves
- Volatile Markets: Dip makes Posco (PKX) a bigger bargain
- Volatile Markets: Steven Madden (SHOO) will wear well
- Volatile Markets: Precious metals are the safest place to be
- Volatile Market: Just ignore it; don't try to time it
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