Boeing (BA)

Their situation with contractors is messy, which makes him think that Boeing isn't on the right path yet.

He bought a lot last year and expects it to rise. China is expected to pick up deliveries of the 737 Max, which will generate a lot of free cash flow.

BA is still down from its high pre-2019. BA of course experienced a significant headwind in the last few years caused by airline crashes and review of the MAX. BA’s sales recently just reached back to 2019 levels, but BA is still experiencing negative operating losses. The balance sheet has $39B in net debt. Total debt is around 4.2x times the trailing twelve-month cash flow of $9.2B. The company is still on its way to recovery, sales and bookings have accelerated into double-digit growth in recent quarters. The company expects to generate $3.0-$5.0B in free cash flow in 2023. Based on consensus estimates, EBIT is not expected to come back to 2018’s level until 2024. We are generally not a huge fan of turnaround stories, however, we think BA could have potential here. The stock is showing good momentum, and could benefit from lower interest rates (if and when) as well as a lower US dollar. We would be OK with a slow accumulation, keeping a position size small while it further builds on its operational recovery. 
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Is one of July's top performers. Revenge travel remains a tailwind.

Meandering. He'd be more constructive if it took out the highs of 2021, as that would indicate a change for the positive. It's been making a series of lower highs and lower lows, making him cautious. 

The company will get it together eventually, but gradually and not smoothly, because Boeing has so many troubles. Travel remains strong. Be patient.

Oligopoly, it's BA and Airbus. BA has had a tumultuous couple of years. If the industry structure weren't so favourable, he's not sure BA would be around. Not sure it's out of the woods, seems there are perpetual overhangs. Look at RTX, an aerospace and defense company, or Airbus.

The market is bullish on it but the analysts aren't due to a high FMV which is declining and is negative 85%. He doesn't like the balance sheet. Sell if it goes to $185.

The FAA will hang them. Who knows how long this latest screw-up will last, though it wasn't their fault. Are only two companies in this space. 

Up 73% from the September lows because of delivering more planes. They just announced production delays, which will hurt free cash flow, because the effected 737 Max is 60% of free cash flow, a near-term issue. Not a safety issue, but a supply one. They enjoy a duopoly with Airbus and have a large backlog of orders. A volatile stock, but stick with it. An opportunity lies ahead.

Supply chains and employee absenteeism are still real issues. Starting to change. BA is starting to make more deliveries. Fully valued, priced in a lot of the good news, not pricing in upcoming slowdown. He prefers the smaller names like HRX.

Undervalued. Two years ago Boeing has many woes: manufacturing problems, Chinese demand faded, the 737 Max disaster and FAA scrutiny. Things have completely changed.

Their production is going up.

Aerospace is on fire with a backlog that can last years. Boeing yesterday just secured a mega order for planes from the Middle East, which he feels if the first of more to come. Yes, airplanes are highly cyclical, but planes get old like anything and need replacement--from China, US, South America. Boeing shares have fallen so far. Buy under $200.

Industry structure is favourable, as there are only 2 manufacturers. High profitability. Jury still out. Difficult to guess whether it will fall, anything can go down. He really likes RTX, as you get aerospace and defense, counter-cyclical business.