The Boeing Company (BA) - Flying High or Crashing?

• 2 min read

  • 401K
  • Neural Nets
  • Stocks
  • Trends tags:
  • 401K
  • BA
  • Neural Nets
  • Stocks meta: _aioseop_keywords: Stocks, BA, 401k, Neural Nets, Boeing, Northrop Grumman, Airbus dsq_thread_id: '215921867' author:

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 Airbus’s (their main rival) plane design to replace the Air Force’s aging in-flight fueling planes.

Fundamental Analysis

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%. BA’s earnings grew over 83% for the past year with last year’s earnings being $5.26. Analysts expect BA’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?

Technical Analysis

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. It’s looking short term Bearish to me but long term it’s still Bullish for one simple fact, in my mind, it’s above the 200 WMA. But is it a Buy?

BA-022908

Neural Net Signal

SNM-BA-022908My BA neural net model issued a SELL signal on 2/26/08 to open a short position and it remains short going into today’s open. According to the neural net, it’s not a BUY but a SELL!

 

Price Targets

My Monte Carlo simulation indicates a downward bias for BA at this moment. That’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.

Bottom line

I like BA for my 401k as a long term play but I’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, I’d look to BUY for my 401k but in the meantime, do nothing.

Disclosure: No positions

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