The Boeing Company (BA) was flying high for a while but recently has been dragged down through this market correction. BA is generally a popular stock and its even been showcased on Wallstrip last week, right before they lost a $40 billion dollar contract to their rival Northrop Grumman. This is a slap in the face for Boeing because Northrop will be using the Airbusâ€™s (their main rival) plane design to replace the Air Forceâ€™s aging in-flight fueling planes.
S&P currently rates BA as a 4 star company and was downgraded from 5 stars at the end of last year. BA pays a $0.40 dividend, its gross margin is 16.1%, net profit is 6.1%, and its PE ratio of 15.8. It has an ROA of 7.3%, an astounding 73% ROE, and a ROI of 16.4%. BAâ€™s earnings grew over 83% for the past year with last yearâ€™s earnings being $5.26. Analysts expect BAâ€™s earnings to grow to $5.98 in 2008 and $7.15 in 2009! So far BA looks pretty good and with its recent price pull back, but is it a BUY?
The technical picture for BA is so-so on the weekly charts. After peaking around $105, BA has pulled back to the $80 level and below its 50 WMA. Itâ€™s looking short term Bearish to me but long term itâ€™s still Bullish for one simple fact, in my mind, itâ€™s above the 200 WMA. But is it a Buy?
Neural Net Signal
My BA neural net model issued a SELL signal on 2/26/08 to open a short position and it remains short going into todayâ€™s open. According to the neural net, itâ€™s not a BUY but a SELL!
My Monte Carlo simulation indicates a downward bias for BA at this moment. Thatâ€™s probably why the BA neural net model is short! The short term downside targets are: $78, then $71, and then $64. The most likely objective is the $71 level. Short term upside targets are $85 and $92.
I like BA for my 401k as a long term play but Iâ€™d wait to see if BA keeps selling off as indicated by my neural net model and my Monte Carlo sim. If it does and reaches the price objective of $71, Iâ€™d look to BUY for my 401k but in the meantime, do nothing.
Disclosure: No positions
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