Boeing (BA)

Problems with the Dreamliner have been well documented. Stock is had a terrific run so he would not buy at this price. Although they are allowing them to get the 787s back in the air, it is not certain that there is a long-term fix for the actual problem. It’s not even understood what went wrong in the 1^st place.

Airlines need the airplanes from a fuel efficiency standpoint. Still thinks there is a lot of opportunity here. This is a long-term secular story and will probably take us through 2020. Expect we can look for at least a mid to low teens growth of earnings through this period.

(Top Pick Mar 8/12, Up 16.98%) Stock fell on battery issues. Yesterday they got approval to start testing their new design. Good demand on their other models.

This is a long-term story. Airlines want the airplanes as much or more than Boeing wants to sell them. They need the airplanes. It is new technology and much more cost-efficient. The battery problem is only a bump in the road. All new technology goes through problems. Dividend yield of 2.58%.

Caller Sold a $60 January Put for $0.50 and bought a $75 January Call. By buying a Call and selling a Put, you have actually replicated owning the underlying shares of this company. Effectively you have a long stock position. The risk he sees with the strategy is that most investors tend to leverage it.

Has a very, very small balance sheet. Most of the airlines are government funded, which blows off their balance sheet. Very, very high Price to Book. He has a model price of $49.96, which is a negative 28%.

(A Top Pick Aug 31/11. Up 6.72%.) $300 billion backlog. Into full production of the Dream Liner 787, which is very, very important. Even though there are global issues on economic growth, airlines globally have to update their equipment because it is more fuel efficient. Also, have the 737 Refresh, which is in full production. Will spin off of a lot of cash over the next 5-10 years.

Stock is fairly highly valued right now at about 8X Book. There have been some order slowdowns, which probably explains why it is not surging ahead right now. Too expensive as an investment. 2.4% dividend yield.

(A Top Pick Aug 31/11. Up 11.46%.) $300 billion backlog. They are now in full production and this is a multiyear process of filling orders. Their 737Max is very attractive because it is 11%-12% more fuel efficient. Thinks it can grow its earnings 15%-20% for the next several years.

(A Top Pick Aug 2/11. Up 11.97%.) Very strong backlog. Last year they got a lot of 787 orders so now it is execution to ramp up production on those. They're now getting a lot of 737 orders which will drive order growth. Has a high $80 target. You could still Buy at this point.