The airplane industry, particularly Boeing ( BA), has been on fire. The company has a backlog of more than 560 plane orders from more than 40 customers.The 787 Dreamliner will be the replacement plane of choice for many of today's airlines. The main issues Boeing faces is whether it can meet existing demand and whether a competitor will emerge from China within the next two decades. Either way, the companies that supply Boeing are going to be in great shape for many years to come, and with Boeing trading at an all-time high with a P/E of 31 that prices in much of its growth, it's time to look at all the public companies that supply Boeing. Stockpickr member gross641 has set up the complete portfolio of public companies that supply parts to Boeing and is tracking the performance of the portfolio. Since he started tracking on April 27, the portfolio is up 5%. Some of these suppliers include: Ametek ( AME): In the portfolio, gross641 writes:
Ametek operates in two primary segments, the electromechanical group and electrical instrumentation. Top-line growth between the two segments increased 19.3% to $505.3 million. Internal growth was 9% and a significant portion of their sales were international. (Excludes 2% favorable currency translation.) International sales last quarter were 49.9% of total consolidated sales. Ametek continues to keep costs in line by outsourcing material procurement to its international facilities in Shanghai, the Czech Republic and Mexico. All segments had double-digit sales growth, led by processed aerospace and its record backlog of 561.4 million orders. Margins are continuing to improve in the electronic instrumentation group (22% of sales from 20%). Operating margins for the Electromechanical Group are slightly lower at 17.1% of sales. Ametek is being used inside the new Boeing 787 Dreamliner. Ametek will supply Boeing with "Integrated Cabin Pressure Indicator Displays," which allow the crew to monitor air pressure inside of the cabin. Along with many other Boeing manufacturers, Ametek has seen drastic improvement in operational efficiencies (inventory reduction, margin improvement) by the introduction of Six Sigma manufacturing. Cost of goods sold as a percentage of sales has continued to decline. With this adoption, engineers are more focused on customer needs, there is less engineering rework and orders are always on time. As previously mentioned, Ametek has been able to grow its company through inorganic acquisitions. These companies are bought with 10%-12% margins on sales, and by applying Ametek's methods of production, the return on equity and return on investment capital improves.Alcan ( AL): "Supplies aluminum for the planes. Also owned by super hedge fund SAC Capital." Donaldson ( DCI): "Donaldson provides filtration products that are used in aerospace and other industrial applications. On the last conference call, some things stood out, including a sales mix to lower operating margin products and higher distribution costs. In addition, new truck emission standards by the EPA could crimp margins as the company makes an investment to research new filtration products for diesel engine applications."