Buy BOEING Stock Now?
Boeing stock $BA crashed by more than 80% from all time high in about a year. The troubles started when two of their Boeing 737 Max aircraft crashed. This was their best selling aircraft. Now, with this crisis, with aircraft grounded all around the world, the stock prices of both Boeing and Airbus $AIR.PA crashed. Most airlines around the world are going bankrupt. Even when this crisis is over, the surviving airlines would be buying planes from the ones that went bankrupt. It is unlikely that they are going to buy new planes from Airbus or Boeing. Troubles for Airbus are big but for Boeing, they are huge. The advantage that Boeing has over Airbus is the defense and space segment. Boeing is the second military contractor in the world after Lockheed Martin $LMT . The US military and NASA will always be spending more money and much of these spendings will go to Boeing. The biggest problem for Boeing is the big debt that they have accumulated. They tried to solve their problems by taking a huge debt and they need to pay $12 billion this year. They are going to have a negative free cash flow, how do you repay such a big debt? That's why they are asking for a bailout. Bailouts are not always a good thing. They will have to dilute their shares to repay the government. AIG, for example, is still trailing the market. Boeing does have a moat are is too big to fail but is it worth making an investment at such a price? We need to understand why the stock price skyrocketed since 2016. Boeing is the best performing Dow Jones $DJ30 stock under the Trump administration. There are three reasons for that. 1. The economy was great and Boeing increased their margins. This is something that they won't be able to replicate anytime soon. 2. Subsidies and tariffs on Airbus 3. Share buybacks. Boeing was using all its cash to buy back shares. Boeing stock price didn't crash, it returned to normal. A good price for me to invest is $60/share. It is too expensive for me. But because this is company with a moat and will most probably do well in the long-term, you may buy it if you're looking for average returns. As for me, there are much better investments out there. Watch the full video on YouTube and Subscribe: https://www.youtube.com/watch?v=ezpGvZcw9mU&list=UUPO3uUyoXSaFWG-Ldq1mqEQ Here's my full analysis of Boeing: https://ishfaaqpeerally.teachable.com/courses/662813/lectures/14833935 Join my private investing group on Facebook for more: https://www.facebook.com/groups/IshfaaqInvesting/