Boeing (BA) is in the news for all the wrong reasons. In light of the Ethiopian Airlines crash, businesses, travelers, and governments have raised concerns and doubts about the company, and its strong moat and ongoing rise as a business has fallen into doubt as a result. Investors have been trying to work out the impact this might have on the stock. What will the fixes and any remodeling Boeing has to do mean for the bottom line? Does this open the door to competitors? Is the sell-off ultimately overdone?
Wolf Report wrote an article shortly after the news broke making the case for why Boeing's competitive position and business model makes it attractive even in spite of the news. We take that as a starting point to see whether Boeing's moat is as strong as it seems, whether its ex ante valuation made sense, and where the stock might head from here.
Topics covered:
3:45 minute mark - Measuring the fundamental impact for Boeing 13:45 - The salience of Boeing to peoples' lives, and a Behind the Idea theme for 2019 16:30 - Boeing's business model and the new distribution of its risk 23:15 - Government subsidizing on major industrial businesses and the modern moat 33:15 - The surprises in Boeing's accounting statements 39:30 - Reconsidering the cycle's role in investing 45:45 - Not a dip story, but still intriguing?
