From a value investor’s point of view, I’m hoping issues like these scare the markets a bit. They have been trading at a Shiller P/E of 23 versus a historical mean of 16.5, thus making it a bit tougher to find bargains.
Company’s Making Headlines
Indonesia’s Lion Air, a long-time Boeing (BA) client, has struck a deal to purchase 234 airplanes from AirBus. The deal is worth approximately $24 billion. The deal is the largest deal the European plane maker has ever received and comes at a time when Boeing (BA) is trying to find a solution to overheating batteries which causes the FAA to ground all 787 Dreamliners. I haven’t followed the story closely but Boeing’s (BA) struggles, and previous delays, might push some customers to the other side. Just recently, Turkish Airlines signed a contract for 117 jets. Boeing has recently stated Dreamliner flight could restart within weeks and not months.
Gurus were net sellers of Boeing (BA) last quarter as a handful of them reduced their positions. Gurus who reduced or sold out include:
- Jim Simons, Renaissance Technologies (sold out)
- Arnold Schneider, Schneider Capital Management
- Ray Dalio, Bridgewater Associates
- Paul Tudor Jones, The Tudor Group
- Ken Fisher, Fisher Investments
In the last quarter, Gurus were net sellers of Anheuser-Busch. Gurus who either sold out or reduced their position include:
- Lee Ainslie, Maverick Capital
- Steve Mandel, Lone Pine Capital
- Wallace Weitz, Weitz Wallace R & Co.
- RS Investment Management
Finally, Dow Jones component United Technologies (UTX) was upgraded to “Buy” from “Hold” over at Citigroup based on “attractive valuation” following its acquisition of Goodrich. Citi also raised UTX’s price target from $88 to $110.
Gurus have been mixed on UTX. The one transaction to take note of is Lee Ainslie’s sale, which comes right after he established a 2.5% position for the Maverick Capital portfolio.