Boeing (BA)

The crash of their 737 in Indonesia hit the stock today. Stay low and wait--see what the aviation findings are. If it turns out that their aircraft are in trouble, this stock will fall further.

Their only competition is Airbus, and Boeing is producing well. They are growing their services business to increase margins. This may work. Plus, there's growing air travel, which is a tailwind. Their free cash flow is interesting, but the stock is a little expensive on the earnings side.

They dominate the aerospace sector. Great company but the valuation is stretched. They sold it when trading at $250. They missed a little upside. There is a risk attached to every incremental win and he feels this is more like a momentum stock at the moment. Buyer beware.

Aerospace and defence have long contracts, so that's attractive. Also, you don't pay for the future as you do with pharma, because these companies keep their projects in development in secret; then they just unveil them. He likes Boeing for its civil aviation and defence sides. He prefers this over Lockheed.

Two-thirds commercial jets, one-third is defence. They have a giant backlog of planes to deliver. They've grown their dividend 28% a year over the last 5 years. This will beat rising interest rates. Great runway ahead. (1.9% dividend, Analysts' price target: $412.63)

He sold about 9 months ago on valuation but it has continued to do well. There is a lot of risk inherent in owning this company because of the premium it is trading at. At some time the multiples will start to compress. The cycle will 'trump' tariffs concerns.

Fantastic company. He owned it until summer 2016 based on "price exhaustion" where a company does everything you want it to, but it's grown so big that it now has risk attributes. Multiple is very high now. It risks a serious pullback.

They are vulnerable if there is a trade war. The stock has come off. Its valuation was reasonable. 2% yield with a low payout ratio. Top 1% on price momentum.