Will Boeing’s Dreams Turn into a Nightmare for Investors?

With shares of Boeing (NYSE:BA) trading at around $74.02, is BA an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Would you like to travel on a beautiful new plane? More specifically, it’s a Boeing 787 Dreamliner. Now, before you make this decision, you must keep in mind that not every little detail in order to ensure passenger safety has been thought out. But that’s okay. Don’t worry. These problems are normal for a jet program that’s just entering service. If a few people have to fear for their lives during an emergency landing, so be it. That’s par for the course. So, would you like to board the Boeing 787 Dreamliner? There have only been two major issues so far, one emergency landing with United Airlines and now a grounding with Qatar Airways. Both incidents related to the electrical generator. But who needs a fully operational electrical generator while flying?

If you’re looking at this situation from a moral and safety standpoint, it’s atrocious. Everything on the 787 Dreamliner should have been tested 100 times over before taking passengers. From an investing standpoint, these incidents have done nothing more than present a buying opportunity. It’s likely, as well as hopeful, that Boeing will fix the error to make sure it never happens again.

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There are several other reasons that Boeing won’t have a problem making a healthy profit in the future. These reasons include North Korea, Iran, Afghanistan, Iraq, Syria, Libya, and more. Saudi Arabia is also a big spender when it comes to weaponry, and they have money to burn.

Another potential positive is that while there has been some insider selling recently, it’s nothing compared to what we have seen at other companies ahead of the fiscal cliff. There doesn’t seem to be any panic at Boeing when it comes to the fiscal cliff situation.

Other positives include healthy margins, over $5.80 billion in operating cash flow, a 2.30 percent yield, and a forward P/E of 14.60. The yield isn’t as impressive as the yield offered by competitors Lockheed Martin (NYSE:LMT) and Northrop Grumman Corporation (NYSE:NOC), which are five percent and 3.20 percent respectively, but it’s nothing to complain about, either.  

Let’s take a look at some important numbers for Boeing.