For the first two months of the second quarter Boeing (NYSE: BA) was on fire. BA gained significantly during that time, but then the company announced a delay in their much-awaited DreamShip -- a delay that opened the door for the airlines to cancel orders. Speculation based on that scenario slapped the stock back down to the flat line for the second quarter.
Unfortunately, the news does not get better for Boeing. There is too much capacity in the airline space, and new planes are not needed.
I would be a seller of Boeing today.
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Reader Comments (Page 1 of 1)
7-18-2009 @ 2:25PM
D. N. said...
This is terrible advice.
BA is now selling for less than half its all-time high and is 40% off its 52-week high. The stock currently has a 4% yield and already has lost value over 787 delays factored in. People who are actually involved in the aviation industry recognize that 1) the latest 787 delay is very likely to be the last and actually a sign that design work, while incredibly slow, is nearing completion, and 2) that fuel prices and aging drive the need for economical new jets to replace older ones that burn more fuel.
The 787 program, while delayed, is still on track to start making Boeing a lot of money a year from now. Investors who are willing to hold the stock for that long will probably see fairly sharp gains as trader confidence returns. Even if they don't, BA is a strong long-term stock to hold with a reasonable and continuous dividend.
Furthermore, people who have bought BA and held it to this point would be foolish to sell it now. If they were looking to avoid a loss they should have sold it before it got this low; if they are holding it now, previous losses are irrelevant to calculating future potential profit, and holders should be rational enough to realize realize BA's current potential to climb once the 787 program begins deliveries, and hold the stock.
BA is a good hold and a risky but potentially profitable buy right now.
7-20-2009 @ 12:20PM
holdenll said...
I also believe this is bad advice. I purchased this last week at 41.20 or so... Using Point and Figure Charts, the long and short term trend is up...would use a stop around 37. I think 64 is a reachable target....Earn 4% yield while I wait.