Boeing stock, 1 year performance, cronyism, prelude to war, or the free market?

[VivaRevolution]

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http://www.nasdaq.com/symbol/ba/stock-chart


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The top chart shows Boeing's 1 year stock performance. This is surreal, 160$ a share to 340$ a share in a year.

Here is my question. Can anyone show me underlying numbers in revenue, or profits that support this rise in stock prices?

What are the market fundamentals that justify a 200% gain in value?

First you should know, that the commercial side of Boeing definitely isn't where this gain was driven by. The backlog for 747's, and 777's is non-existant, as shown by their production rate reductions. The 787 won't make a profit until after plane 1000, which is still years away. That leaves one production line making money, the 737. The 767 is still profitable as well, but that is mostly due to the military fueling tanker deal and P-8 Poseiden, which we can count as defense spending.

So, what is going on in defense spending for Boeing to justify this gain?

If we can't explain this, does that not leave cronyism or coming war as the only explanation for this gain?

Disclaimer, 40-60% of my 401k is in Boeing stock. I'm not mad, I'm not jealous of Boeing's success. I am wary of a coming crash as I don't believe their are actual numbers to support this meteoric rise in stock price.

Discuss........

 

[Fawlty]

I know it's bad form to cut/paste wiki, but because I don't know, I thought this might help you start looking. aka lemme google that for you.


In October 2017, Boeing announced plans to acquire Aurora Flight Sciences to expand its capabilities to develop autonomous, electric-powered and long-flight-duration aircraft for its commercial and military businesses, pending regulatory approval.[101][102]

In December 2017, the Wall Street Journal reported Boeing has been in takeover talks with the 18,000 employee strong Embraer, valuing it over its $3.7 billion market value, awaiting Brazilian government approbation.[103] The two companies both confirmed that a potential "combination" was being discussed, with a transaction subject to approval by the Brazilian government and regulators, the two companies’ boards and shareholders.[104] The potential deal is seen as a reaction to the Airbus-Bombardier deal on the CSeries.[105]

Embraer’s engineers could work on Boeing’s future developments, the New Midsize Airplane or a New Small Airplane, but it wants to control at least Embraer's airliners to avoid repeating the B787 debacle: it partnered with major subcontractors and handed them engineering work, but those weren’t up to the task, resulting in unprecedented delays, overruns of billions of dollars and Boeing was forced to buy out some.[48]

In 2017, Boeing won 912 net orders for $134.8 billion at list prices including 745 737s, 94 787s and 60 777s, and delivered 763 airliners including 529 737s, 136 787s and 74 777s.[106]

In January 2018, a joint venture was formed by auto seat maker Adient (50.01%) and Boeing (49.99%) to develop and manufacture airliner seats for new installations or retrofit, a $4.5 billion market in 2017 which will grow to $6 billion by 2026, to be based in Kaiserslautern near Frankfurt and distributed by Boeing subsidiary Aviall, with its customer service center in Seattle.[107]

 

[VivaRevolution]

I know it's bad form to cut/paste wiki, but because I don't know, I thought this might help you start looking. aka lemme google that for you.


In October 2017, Boeing announced plans to acquire Aurora Flight Sciences to expand its capabilities to develop autonomous, electric-powered and long-flight-duration aircraft for its commercial and military businesses, pending regulatory approval.[101][102]

In December 2017, the Wall Street Journal reported Boeing has been in takeover talks with the 18,000 employee strong Embraer, valuing it over its $3.7 billion market value, awaiting Brazilian government approbation.[103] The two companies both confirmed that a potential "combination" was being discussed, with a transaction subject to approval by the Brazilian government and regulators, the two companies’ boards and shareholders.[104] The potential deal is seen as a reaction to the Airbus-Bombardier deal on the CSeries.[105]

Embraer’s engineers could work on Boeing’s future developments, the New Midsize Airplane or a New Small Airplane, but it wants to control at least Embraer's airliners to avoid repeating the B787 debacle: it partnered with major subcontractors and handed them engineering work, but those weren’t up to the task, resulting in unprecedented delays, overruns of billions of dollars and Boeing was forced to buy out some.[48]

In 2017, Boeing won 912 net orders for $134.8 billion at list prices including 745 737s, 94 787s and 60 777s, and delivered 763 airliners including 529 737s, 136 787s and 74 777s.[106]

In January 2018, a joint venture was formed by auto seat maker Adient (50.01%) and Boeing (49.99%) to develop and manufacture airliner seats for new installations or retrofit, a $4.5 billion market in 2017 which will grow to $6 billion by 2026, to be based in Kaiserslautern near Frankfurt and distributed by Boeing subsidiary Aviall, with its customer service center in Seattle.[107]

The Embraer thing is a big deal, the rest is just status quo operations.

Of course if buying McDonnell Douglas is any indication of the actual gains from purchasing a competitor, it seems that speculation would be highly suspect.

 

[loyalyolayal]

Sherwood got out just in time.

 

[Cubo de Sangre]

Disclaimer, 40-60% of my 401k is in Boeing stock.

You work there?

 

[jonharrison]

• 
  
  

http://www.nasdaq.com/symbol/ba/stock-chart


_____________________________________________________


The top chart shows Boeing's 1 year stock performance. This is surreal, 160$ a share to 340$ a share in a year.

Here is my question. Can anyone show me underlying numbers in revenue, or profits that support this rise in stock prices?

What are the market fundamentals that justify a 200% gain in value?

First you should know, that the commercial side of Boeing definitely isn't where this gain was driven by. The backlog for 747's, and 777's is non-existant, as shown by their production rate reductions. The 787 won't make a profit until after plane 1000, which is still years away. That leaves one production line making money, the 737. The 767 is still profitable as well, but that is mostly due to the military fueling tanker deal and P-8 Poseiden, which we can count as defense spending.

So, what is going on in defense spending for Boeing to justify this gain?

If we can't explain this, does that not leave cronyism or coming war as the only explanation for this gain?

Disclaimer, 40-60% of my 401k is in Boeing stock. I'm not mad, I'm not jealous of Boeing's success. I am wary of a coming crash as I don't believe their are actual numbers to support this meteoric rise in stock price.

Discuss........

Like Fawlty showed, Boeing has been working to expand their business portfolio. Now I’m not the most knowledgeable guy in the world about stocks, but the aviation community is buzzing about Boeing buying Embraer and cutting out some additional Asian and Middle Eastern markets for airliner sales. I think it’s mostly just speculation that those deals will be net gains. Most of Boeing’s military aircraft are no longer in production, and while they have the KC-46 and that new Navy drone, the loss of the B-21 contract really hurt their military side.

 

[SBJJ]

Damn. Had no idea it had done so well. Shit

 

[VivaRevolution]

Like Fawlty showed, Boeing has been working to expand their business portfolio. Now I’m not the most knowledgeable guy in the world about stocks, but the aviation community is buzzing about Boeing buying Embraer and cutting out some additional Asian and Middle Eastern markets for airliner sales. I think it’s mostly just speculation that those deals will be net gains. Most of Boeing’s military aircraft are no longer in production, and while they have the KC-46 and that new Navy drone, the loss of the B-21 contract really hurt their military side.

I could see the Embraer deal driving much of this. Think I will wait to transfer my holdings to a safer play after the deal goes through, or doesn't pan out.

I definitely don't see the long term play here. The Russian/Chinese venture is coming. In 15 years they will have 30-40% share in the single aisle market, and be making their play for duel aisle.

Boeing gave the Chinese the carbon fiber tech, and Airbus gave them the production model, in exchange for airplane orders. With Russian aero engineering on board, their is no stopping them.

 

[Jack V Savage]

I thought we learned in the WR that stocks aren't affected by business results or anything. It's just, as long as the president is a Republican doing Republican-y things, stocks go up. They always go down if the president is a Demmycrat.

 

[HomerThompson]

I thought we learned in the WR that stocks aren't affected by business results or anything. It's just, as long as the president is a Republican doing Republican-y things, stocks go up. They always go down if the president is a Demmycrat.

Boeing's stock more than doubled the last year. Story checks out.

 

[HomerThompson]

I thought we learned in the WR that stocks aren't affected by business results or anything. It's just, as long as the president is a Republican doing Republican-y things, stocks go up. They always go down if the president is a Demmycrat.

 

[VivaRevolution]

Damn. Had no idea it had done so well. Shit

Compare that to 260 to 330 for Lockheed Martin in the same time period.

 

[SBJJ]

Compare that to 260 to 330 for Lockheed Martin in the same time period.

Very nice for Boeing holders. I just think it's the way the company is being run.

My apologies that a couple of dudes are trying to derail your thread like they do with many others

 

[VivaRevolution]

I thought we learned in the WR that stocks aren't affected by business results or anything. It's just, as long as the president is a Republican doing Republican-y things, stocks go up. They always go down if the president is a Demmycrat.

Well under Obama it did go from 26$ to 160$.

Everyone should let that sink in. If you bought Boeing stock at 26$ a share in 2008, you have seen 1200% growth in your investment.

For some reason, even if the market was undervalued in 2008, I don't think any market indicators could justify a 1200% gain. Seems fishy to me.

Lesson from 2008. Keep liquid assets. If we see another crash, you can make a killing.

 

[VivaRevolution]

Very nice for Boeing holders. I just think it's the way the company is being run.

My apologies that a couple of dudes are trying to derail your thread like they do with many others

The company is being ran into the ground.

If people knew what management was like in that company, they would think twice about investing. Of course Boeing is like Goldman sachs, it isn't just in the banking, or aero industry, they are also in the politicians for sale business, and this may in fact be, both of their primary business ventures.

 

[jonharrison]

I could see the Embraer deal driving much of this. Think I will wait to transfer my holdings to a safer play after the deal goes through, or doesn't pan out.

I definitely don't see the long term play here. The Russian/Chinese venture is coming. In 15 years they will have 30-40% share in the single aisle market, and be making their play for duel aisle.

Boeing gave the Chinese the carbon fiber tech, and Airbus gave them the production model, in exchange for airplane orders. With Russian aero engineering on board, their is no stopping them.

I don’t know, Boeing’s commercial side just outsold Airbus for, what, the sixth year in a row? I’m also pretty sure that they had their best year for commercial sales ever (don’t quote that). A new company, especially in aviation, is always a risky prospect. Given current Chinese and Russian airframe safety records, I wouldn’t be too concerned about competition if I was Boeing. Maybe after the Russian/Chinese designs prove themselves, but it’s a risky investment before then.

 

[VivaRevolution]

I don’t know, Boeing’s commercial side just outsold Airbus for, what, the sixth year in a row? I’m also pretty sure that they had their best year for commercial sales ever (don’t quote that). A new company, especially in aviation, is always a risky prospect. Given current Chinese and Russian airframe safety records, I wouldn’t be too concerned about competition if I was Boeing. Maybe after the Russian/Chinese designs prove themselves, but it’s a risky investment before then.

Everything both Airbus and Boeing are doing right now, is in preparation for the Russian Chinese venture. Their normal tricks to keep their duopoly won't work. Even Boeing and airbus's pockets aren't as deep as the Chinese governments.

I could see them selling their single aisle at 10 million per plane, for a decade, taking 100's of billions in losses, to secure their foothold in the market place.

The stupid thing on Boeing and airbus's part, is that they are playing the bean counter game, instead of the engineering innovation game. Instead of investing in, in house capability, they are gutting their talent, and reducing costs.

It's sad to watch a company that was built on innovation, attempt to become an automanufacturing assembly line, to reduce labor costs, when 7% of the cost of an airplane is in labor.

Corporate America's bean counters know only one trick, and it isn't creative, it is destructive cost reduction.

Edit: to your point about Boeing out selling airbus, Boeing used to control 60% of commercial market. When they bought McDonnell Douglas, instead of increasing their market share, Airbus actually gained, and began to outsell Boeing by a hair for a number of years. Boeing is just now, regaining the lead by a hair.

 

[GhostZ06]

Boeing defense section has been getting pretty small. They havent been able to sell to many fighter jets recently

 

[jonharrison]

Everything both Airbus and Boeing are doing right now, is in preparation for the Russian Chinese venture. Their normal tricks to keep their duopoly won't work. Even Boeing and airbus's pockets aren't as deep as the Chinese governments.

I could see them selling their single aisle at 10 million per plane, for a decade, taking 100's of billions in losses, to secure their foothold in the market place.

The stupid thing on Boeing and airbus's part, is that they are playing the bean counter game, instead of the engineering innovation game. Instead of investing in, in house capability, they are gutting their talent, and reducing costs.

It's sad to watch a company that was built on innovation, attempt to become an automanufacturing assembly line, to reduce labor costs, when 7% of the cost of an airplane is in labor.

Corporate America's bean counters know only one trick, and it isn't creative, it is destructive cost reduction.

Edit: to your point about Boeing out selling airbus, Boeing used to control 60% of commercial market. When they bought McDonnell Douglas, instead of increasing their market share, Airbus actually gained, and began to outsell Boeing by a hair for a number of years. Boeing is just now, regaining the lead by a hair.

Fair enough, didn’t know that about Boeing’s history with Airbus, I’d thought it was way behind just a couple years ago. I agree that Boeing needs to focus on innovation in order to survive, but innovation with poor safety records isn’t going to pay the bills either. I mean the Russians have some quality airframes, but the Chinese scare me a bit.

 

[VivaRevolution]

Boeing defense section has been getting pretty small. They havent been able to sell to many fighter jets recently

I believe they have divested in the fighter jet market. They have a lot of focus on sattelites, drones, and service contracts.

Lockheed I think prioritized fighter jets, and rather than go head to head with LM, Boeing I think just went around them.