Is Boeing a Bargain Here?

With shares of The Boeing Company (NYSE:BA) trading at around $76.01, 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

Boeing 787 Dreamliner Airplane2Boeing is presenting a new battery to regulators today in hopes of getting the Dreamliner to fly again soon. The Dreamliner has been grounded for five weeks after batteries caught fire on two planes. In related news, United Continental Holdings (NYSE:UAL) might remove the Boeing 787 from its flight plans until early June, with the exception being a Denver-to-Tokyo flight planned for May.

If we take a bear viewpoint, then there is a simple point to be made. Would you fly on a Dreamliner today? Would you feel comfortable with your family members flying on a Dreamliner today? On top of all the problems the plane has had, Japanese investigators recently found problems with the fuel tank valve. The Dreamliner’s reputation has been severely damaged. It will take years for this to be overcome. Any minor problem will also be looked at under a microscope by the media.

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Now let’s take a look at the more macro bull side. It should first be pointed out that Boeing was written about here several months ago. While the rating was an OUTPERFORM, it was warned that the Dreamliner was too dangerous in its current state. Longs were upset by these comments. Perhaps longs will be happy this time around. If you look at the 747, it had many problems in its early days as well. At the time, it was looked at as a failure. Well…how does it look now? Boeing is one of the smartest and most innovative companies in the world. Of course there will be problems working with new technologies, and as stated last time, there should have been more testing prior to public flight. However, Boeing will get it right this time because it’s mandatory. Regulators have already stated that they must be 1000 percent sure the Dreamliner is safe before allowing it to fly again. When this much money is involved and the brainpower is there to get the job done, the task will likely be accomplished.

Let’s also not forget that Boeing is a highly diversified company. This is a company that has established important relationships in many different areas, which has led to consistent growth.

It was interesting to see the stock climb 1.64 percent yesterday when the market was hurting. This is almost always a good sign of near-future performance.

Let’s take a look at some important numbers prior to forming an opinion on the stock…