Boeing (BA)

They just reported a weak quarter with very negative cash flow and no sense when management will right their ship.

It reports Wednesday. Nothing but bad news lately. They must announce something new; it can't be business as usual, like announcing a succession plan.

A dog. It gets so much bad publicity, including poor quality control. They should bring in an insider to replace the outgoing CEO.

Today, the CEO announced he will step down when the year ends or when a replacement is picked. Replacing him for now is an insider (not great, not bad). Hard to tell what will happen next.

He just bought a little of this. Culture starts at the top, the CEO. It's a great trade. The company is going on the road to get rid of CEO Calhoun.

They have a long-term big problem. He won't touch it. He sold it right after the Alaska Airline fiasco. The CEO isn't the solution or problem. Production is declining and cash flow and profits will be crimped.

They keep stumbling; have deep quality control problems and will take time to resolve. However, it is an American company and will receive government support. Enjoys a duopoly and barriers to entry (like Bombardier). He owns Airbus instead, but you will eventually make money on Boeing, but it could take 5 years to resolve their problems.

It is close to a 52 week low. It is going through an improvement process and the new CEO is establishing a new culture with the focus on quality. However it is having difficulties with its 737 Max and the FAA did their own audit and found more problems. It needs to bottom before it can go up again.

It's hard to admit this, but this is right. There's been nothing but bad news with Boeing. She will stick with Boeing, because demand for planes will continue, but clearly Boeing has a lot of work to do in terms of control of production needing to be brought in-house more. Needs work to restore confidence and need to focus on detail.

They need to change management to restore investor confidence.

It was a core holding as we came out of Covid.  After all, there are only 2 companies building planes and Boeing was coming out of the pandemic and the world would return to travel. Problem is, he bought Boeing a lot earlier, before shares plunged and their plane accidents kept happening. It became a clown show. True he made some money in the 2021 rally, but Boeing kept dropping the ball like taking forever to retrofit its Boeing 737 Max and getting them back in the air. He finally sold in spring 2022 when thousands of these jets were grounded. Then the feds grounded their 787 Dreamliner, a huge seller. Then, the company reported terrible quarters. Then, China didn't order airplanes as he had expected, given the icy relations between China and the US. His mistake was selling just when shares troughed and he should have been buying because he ran out of patience and didn't stick to his original thesis (a duopoly in plane-making driven by strong post-pandemic demand).

America needs Boeing to succeed. A private Chinese company wants to take market share from them. But the more Boeing screws up, the more that door opens for this Chinese company. Whatever happens, Boeing's profits will decline, because to fix its ongoing problems, Boeing needs to spend money to assure quality control.

This company is not in charge of its own destiny and he's getting concerned. If the FAA orders it to clean house, shares will probably jump.

Currently at $200, which is the same level as late and early 2022, an area of interest. If you own no aerospace, defence or industrials now is a good time to buy, and you can add if it falls another 10% to $180.

Is -18% YTD. Everyone is angry at Boeing, but it doesn't matter because Airbus (the other company in this duopoly) doesn't have enough planes. If you are under water this, be patient and average down.