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Come Fly With Boeing

NEW YORK (TheStreet) -- I like Boeing (BA), because it seems to be a balanced defense and aerospace company. It supplies both the military and commercial markets and at the same time serves both the domestic and foreign markets. If things are stable and peaceful, the civilian markets place orders; when things get tense and unstable, the military places orders. The company produces during war and peace.

Recent political uncertainty in the U.S. seems to give the stock price a lot of volatility, as seen in Barchart's hourly trading chart of activity during the past month. Lots of movement but around the same price going into and out of the past month:

The same has held true for the past six months. Although the market as measured by the Value Line Index was slightly down by about 4% for the period, Boeing has remained again about the same price. Lots of movement but almost a net nothing.

Factors to Consider

Barchart technical indicators:

  • 24% Barchart technical buy signal -- positive signals are strengthening
  • Trend Spotter Hold
  • Above its 20-, 50- and 100-day moving averages
  • 5 new highs and up 1.10% in the past month
  • Just 4.51% off its 1-year high
  • Relative Strength Index 73.24%
  • Barchart computes a technical support level at 73.24
  • Recently traded at 74.32 with a 50-day moving average of 72.78

Fundamental factors:

  • 26 Wall Street brokerage firms have assigned 30 analysts to make predictions on the stock
  • Analysts project revenue will grow by 17.40% this year and another 7.80% next year
  • Earnings are estimated to be down by 11.60% this year but increase by 19.10% next year and continue to increase over the next five years by an annual rate of 10.61%
  • The consensus numbers resulted in 12 strong buy, 14 buy, 3 hold and just 1 underperform recommendation for clients
  • The consensus is that investors should see a total annual rate of return between 12% and 16% over the next five years
  • In the last 30 days, 11 of the firms have increased their earnings projections
  • The balance sheet rates an A+
  • The P/E of 14.41 is lower than the market P/E of 15.10
  • The dividend rate of 2.37% is about 30% of projected earnings and almost the same as the market dividend rate of 2.30%
  • TheStreet Ratings staff rates the stock an A-
  • Commercial aircraft production is up
  • The company has more than 4,000 aircraft orders to fill -- several years production
  • Foreign commercial and military sales are now 50% of revenue
  • Even if military budgets in the U.S. are reduced, U.S. commercial orders and both commercial and military orders from emerging economies should more than offset any cuts in U.S. defense spending

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