As markets fret over a decline in the performance of high-flying tech stocks, a segment that got battered last week is facing less pressure.
Boeing Co. (BA, Financial) saw signs of life in afternoon trading after losing 10% of its value over the last 30 days. The world’s largest aerospace company was up 2.7% to over $329 a share in trading on Thursday afternoon.
What's more, the space flight designer and manufacturer led a host of other multinationals into the green after significant dips last week.
The world’s largest heavy-equipment manufacturer, Caterpillar Inc. (CAT, Financial), was up 1.3%. The Illinois-based mega-exporter stood at more than $147 a share.
The world’s largest chemical company, DowDuPont Inc. (DWDP, Financial), climbed 0.83% to just under $63 a share. It is headquartered in Michigan.
And American conglomerate United Technologies (UTX, Financial) rose almost 1%. The Connecticut-based manufacturer of aircraft engines, HVAC, elevators and escalators was trading at just under $126 a share.
As fears dissipate of an all-out trade war, the markets will respond accordingly. So far, it appears Beijing is open to negotiations for a new trade pact, raising confidence among investors who would like to see those discussions produce favorable results.
Boeing Inc.
Even after the buzz about the threats of an all-out trade war, many of the world’s top value investors have managed to keep positions in the stock. Boeing’s shareholders include Mario Gabelli (Trades, Portfolio), Ken Fisher (Trades, Portfolio), John Buckingham (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Caxton Associates, Jeremy Grantham (Trades, Portfolio), David Rolfe (Trades, Portfolio), Tom Gayner (Trades, Portfolio) and David Dreman (Trades, Portfolio). In the final months of the year, several gurus reduced their positions in Boeing, but only two, Hotchkins & Wiley and Louis Moore Bacon (Trades, Portfolio), sold out.
A lot of the interest has to do with the company’s fundamentals.
In 2017, the company with a market cap of over $191.5 billion generated over $93 billion in sales. Sales are split 70-30 between commercial aircraft and defense-end markets, including military aircraft, missile defense, human space flight and launch systems.
Shareholders enjoy a dividend yield of 1.83%, which is 73% higher than its industry competitors. In earnings before interest, taxes, depreciation and amortization, it posted $20.45 per share compared to $12.11 a share in the prior year. EBIDTA has been steadily climbing for the last 15 years. In 2003, EBITDA was $2.79 a share.
Its Piotroski F-score of 7 indicates a very healthy situation.
The aerospace giant also has seen consistent growth in revenue per share. In the last decade, it has reported revenue growth per share of 6.7%.
In long-term debt, the company has seen an increase to $9.78 billion from $9.5 billion the prior year. The debt load, however, is lower than in 2003, when it was over $13 billion.
Boeing has a price-earnings ratio of 24.26 versus the industry’s 24.70. It has a price-book ratio of 543, compared to an industry median of 2.22. Its price-sales ratio is 2.14 versus an industry median of 1.43.
GuruFocus ranks it 6 out of 10 in financial strength and 8 of 10 in profitability and growth.
Gaining ground
Other multinationals that saw a rise in stock price included Walmart Inc. (WMT, Financial), which stood at $89 a share, up 1.53%; Procter & Gamble Co. (PG, Financial), up 1.41% to near $80 a share; The Home Depot Inc. (HD, Financial), up 1.64% to $177 a share; American Express (AXP, Financial), up 1.34% to $93 a share.
Last Thursday, it was a different story as they bore the brunt of the turmoil in the market. The S&P 500 closed down 2.5% at 2,643.71. The Dow Jones Industrial Average closed down 2.9% at 23,960.20. The Nasdaq was down 2.4% at 7,166.68.
Over the last 30 days, Caterpillar lost 7.5%; United Technologies, 7.1%; General Electric (GE, Financial), 8.7%; Proctor & Gamble (PG, Financial), 5.5% and 3M (MMM, Financial), 5.4%.
Analysts say Boeing could lose as much as one-fourth of its value if there is a trade war.
