Boeing (BA)

This has some resistance at around $150. Momentum started to weaken around April. The sector is a reasonably good one. He sold his holdings last fall.

A very cyclical business. Things can change very quickly in the space, and orders that were firm can become less firm. If you own this for dividends alone, he doesn’t know if that is your best bet. Dividend yield of 3.3%.

We had a recovery from the February lows, but it stopped at the 200 day moving average so he would hesitate to buy now. He would stay away from this name.

An excellent company. The premier aerospace company. As a call on the market, the market is probably upwardly bound, but only slightly. There are going to be some bumps down the road, but you are probably going to end up 5% higher on the year, which is not bad with the dividend. As a long-term hold, this is a good name.

Converting backlog into profits has been somewhat difficult for both this company and Airbus. They both faced some production delays. Because of that, there are penalties associated with revenue from customers. It is the penalties that cause the fluctuation in earnings, which translates into volatility in the share price. Finds this one very hard to model, because there is a lot of risk in the manufacturing process.

Has owned this for some time. One of the nice things about ownership in this group is that the production process has evolved to the point where they are putting out the 787 Dreamliner and others, and doing quite well from both a revenue standpoint and a cash flow standpoint. These airplanes are much more fuel efficient.

SEC is looking into the accounting that airlines can do, in spreading costs over an entire project. Not a lot of details the company can disclose on this. This stock is a great example of the amount of fear in the stock market. Since mid-December, it is off about 20%. Backlog has increased to about 7 years, they’ve increased the dividend, and demand of travellers continues to be strong. There are not a lot of negative points on the name, and yet the fear in the market is kind of predicting that there is going to be a slowdown.

Another forgotten name. Just a giant big name that has been under pressure for a long time. It is at its 200 week moving average level. The volume hasn’t shown it, but it has had a very messy run this year. At a great spot to give it a go. If the markets can hold here, this is an easy $10 to the upside.

This chart is very, very typical of a lot of stocks right now. They are moving sideways and kind of trapped in “never never” land, like the market has been in the last 1.5 years. You want to watch this to make sure it does not break down. At this point it is fine. If it bounces off the current support level, where it is trading right now, it should be fine.

World’s largest commercial aerospace manufacturer. A good solid company over the long-term. but is cautious on it in the short term. We have just gone through a great commercial aerospace upside cycle in the last 7-8 years. Their 4^th quarter was a concern. He thinks they are starting to lose sales. Would be interested at the $100 level, but at these levels he is cautious.

He wouldn’t be opposed to this as an entry point. They have a new CEO, who has made it clear that he is not going to make any drastic changes. 70% of revenues comes from commercial jets. What is going to determine where the stock price goes over the next 6-12 months is the 787 plane. Deliveries have been going well which is the positive. The challenge is that they spent more money than originally anticipated, so there has been a bit of margin compression on the 787’s. He is not concerned about the 3.7% dividend yield.

He wants the chart to confirm his strategy. The airlines are super cyclical. Nothing is flagging in the transport space.

They reported earnings this morning and missed by a little bit. The guidance for the next year was very disappointing. He is a little concerned that the aviation business may be in for a bumpy ride. The high US dollar is meaning that less people are flying into North America and this would eventually filter through to airline-related businesses. You can hold it for the long term.

They have a healthy backlog ($500 Billion). They have a high degree of visibility. There has been an issue of some airlines trying to talk down new orders saying there is a glut of wide bodied jets. He thinks there is a bit of gamesmanship going on. For the long term, you should own it. It is a cash flow story.

(Top Pick Dec 17/14, Up 19.51%) They are in full production in the 787 & 787 max. It is just a matter of them just producing airplanes. The visibility is tremendous. Double digits growth in earnings through 2020.