It’s one thing to announce that you’re going to ramp up production. That’s what Boeing (BA) did back on December 20 when it said that it would increase the rate at which it built its 777 plane to 8.3 plans a month in the first quarter of 2011. That was an increase from the seven plane a month production schedule announced last March, which was, itself, an increase from five planes a month.
It’s another to actually sell and deliver the planes. On January 6, Boeing announced stronger than expected deliveries of its 777—and 737—models in the fourth quarter of 2010. (It’s sometimes hard to remember, while we wait for news on January 26 on a revised, revised, revised schedule for the first delivery of the much delayed 787 Dreamliner that Boeing it still churning out other models to meet a huge backlog of orders.)
Wall Street was expecting deliveries of 107-110 planes for the quarter but deliveries for the quarter added up to 116 planes. An increase of 6 to 9 units wouldn’t count for much if we were talking wing nuts, but a Boeing 777 goes for $200 million to $250 million, so we’re talking a hunk of revenue here.
Way back on December 15 I wrote in my post https://jubakpicks.com/2010/12/15/update-boeing-ba/ that investors shouldn’t wait for good news on the troubled Dreamliner before beginning to accumulate Boeing shares. That day the stock traded at $64.49. On January 7, after the news on higher deliveries, the shares were still just $68.80. Still a good entry point.
As of January 11, I’m leaving my target price at $83 a share by September 2011.
Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. The fund did own shares of Boeing as of the end of November. For a full list of the stocks in the fund as of the end of November see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/.  I’ll have the fund’s portfolio as of the end of December posted in a few days.
Boeing today just won a high bid contract from the US government. Any more news on the matter and how it may help Boeing?
Thanks Scottsws, I actually did do that but still think it would be a helpful way to present the information that would also be consistent with other websites. Thinking through different visitor scenarios to the site, I’m thinking more might be interested in seeing the top holdings rather than seeing if the fund contains “X” stock?
Dan,
You don’t need Jimto do that for you. Simply highlight the fund’s portfolio and copy and paste into a spreadsheet. Then you can sort it yourself anyway you like.
This week I took the nice rebound in defense stocks as an opportunity to rebalance out of LMT, NOC, and LLL into Boeing. Boeing can get a kick if a world event kicks defense stocks upwards and when the tanker contract gets going and it has the enormous commercial jet market to provide cashflow for the next few years. With just a bit of good news I think Jim will prove conservative and BA will hit par. ($100) Long term worry..competition from….China. Nice dividend in the meantime. As Cramer would say…buy buy buy.
Thanks for the great site Jim. Unrelated to this post, but I always look forward to your changes to the Jubak Picks 50 portfolio and was wondering if you plan to add/drop this year. I’m hoping you continue to provide recommendations to the 50 portfolio even though you have JUBAX now. Speaking of which…any word on when JUBAX might be available through Fidelity. I’ll buy it if I don’t have to open an account someplace else!
Thanks for the update Jim. I just looked at the fund’s portfolio web page and think it might be nice if you offered an option to sort by % of fund holdings instead. This would be a lot easier to get an idea of what the fund is invested in.