Ockham Research submits: Shareholders of Boeing ( BA ) have endured some tough news over the last year, with a contentious and drawn out bidding war for the US Air Force Tanker contract and multiple delays on delivery of the 787 Dreamliner. Some of these issues also dragged down financial results of the Chicago company as they have missed analysts’ estimates in five of the last seven quarters. However, despite the setbacks, the stock has really taken flight, returning 146% over the last twelve months. The tide has turned for Boeing with production of legacy aircraft really picking up and they are now considered the favorite to win the USAF’s tanker contract worth tens of billions of dollars. In addition, today Boeing reported positive initial results from stress tests of 787 wings. It appears that the two projects that have plagued the stock recently, may actually play out the way Boeing had hoped after some rough years. Value investors who astutely picked up shares of Boeing when they were cheap (and we recommended them: Boeing: Dreamliner Delays Are a Gift ) last fall in the high $40-low $50 range, may be wondering what is the appropriate timing to exit the stock. We are not saying that this is the time because Boeing is performing quite well at the moment, but the time may not be far off. Boeing stock will almost certainly get a boost from the first delivery of the Dreamliner (after five different delays) which today’s test suggests should be within the year. The tanker contract may be settled even sooner, as EADS will decide on if it will submit a new bid for the contract in the next few weeks. It would seem logical that Boeing’s stock would continue to climb higher on positive news such as this. Complete Story
