Airbus (EADSY-OTC)

Still, there are some caveats: Airbus’ beta of 1.66 makes the stock vulnerable to sudden market downturns. The stock current trades at 28.3x PE, above its five-year average of 25.64x. Also, EADSY is trading within $2 of its 52-week high of $35.52 at levels not seen since January 2020. The ongoing parts shortage doesn’t help overcome its multi-year backlog. Read Planes, pizza and clothes for our full analysis.

European stocks have recovered since the war in Ukraine started. Can deliver planes for the next 8-9 years without another order. Has benefited from issues with Boeing. Downside is interference from French government.

Prefers to BA. New plane is the best one out there with the lowest cost and fuel efficiency. Cleaner story than BA. Huge backlog stalled by parts shortages. Production rates will increase next 2-3 years, which will drive earnings.

(A Top Pick Mar 24/21, Up 18%) Still bullish as Airbus is well-positioned to benefit from the recovery in air travel this year and beyond. They still benefit from an oligopoly with Boeing. Also, when Covid hit, the average age of airplanes in the industry hit all time highs, so planes were already old. The airlines look for fuel efficiency in new planes they buy (reducing carbon emission is a major driving), so this could be a key competitive advantage for Airbus.

(A Top Pick Aug 19/19, Down 46%) He still likes it. He doesn't know when air traffic will resume, including business travel. A vaccine or herd immunity will encourage travel. Boeing, their biggest competitor, is still struggling with the 737 Max. Hold onto this, because when air traffic returns this stock will easily triple. (Stay away from Boeing.)

The aerospace sector has been hit hard. However, he thinks carriers will need to go to new planes eventually and buyers will avoid Boeing. Yield 0%