Boeing sets a record in 2013 for the most commercial airplanes delivered in a single year. Will it also deliver to investors in 2014?
It wasn't just planes that took off for Boeing in 2013.
Shares of the Dow Jones Industrial Average component gained 83% last year, more than three times the index average. Backing up the stock's rise was a year of record numbers for the aircraft-maker. The company delivered 648 airplanes and took in 1,531 orders. That left Boeing with a backlog of 5,080.
Where those planes will be made is another issue. Last week, Boeing's machinists' union narrowly accepted a deal that would allow the jet to be made in Washington rather than in any of the other 22 states offering Boeing incentives to move. The tradeoff: union members would have to switch from a defined benefit pension to a defined contribution program. That was tough for many union members to swallow; the vote won with just 51% and some members are planning on challenging the vote.
Still, portfolio manager John Stephenson of First Asset Investment Management believes Boeing's shares are clear for takeoff and is long the stock.
"I think this stock is still going to take flight," says Stephenson. "How it goes higher is factory shipments continue to grow. We're forecasting over 17% growth in 2014 in terms of commercial shipments. So that's very positive."
Stephenson says uncertainty surrounding the 787 line has cleared up and its margins now look promising. He also finds the Boeing's overall balance sheet to be appealing as well.
"This is a company that's also sitting on nearly $16 billion in cash and it's been returning cash to shareholders, unlocking value with its suppliers through the value chain," says Stephenson. "I think this is a company you still have to own until you see the cycle turn down."
Jeff Tomasulo, managing partner at Belpointe Alternative Investments, is also quite bullish on Boeing.
"It looks more like a rocket ship than an airplane," says Tomasulo of Boeing's stock chart. He says that its stock price consolidation after a big move is a sign of a healthy chart.
"Right now, this is a stock you need to own," says Tomasulo. "It's acting very healthy. It's a leader and you want to own leaders."
To see more of Stephenson and Tomasulo on what' s next for Boeing, watch the video above.
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- John Stephenson