We recently published a list of Jim Cramer Stocks: 10 Latest Calls. Since Boeing Co (NYSE:BA) ranks 5th on the list, it deserves a deeper look.
Jim Cramer in a new program on CNBC talked about the latest pullback on Tuesday, when the market snapped its 8-day winning streak. Cramer said that the hopes of rate cuts were buoying the markets all along. According to Cramer, when a company posted a good quarter, its stock roared. If a company reported a bad quarter, investors assumed it was the “last bad quarter” because the Fed was about to start cutting rates.
“In other words, companies could do no wrong. But not today. Today we had a bit of a reckoning and dose of reality being thrown in our faces.”
Cramer talked about two home improvement companies that recently reported their quarters. According to Cramer, these results show that the consumer is still extremely cautious, and high mortgage rates and inflation is keeping spending on big-ticket items depressed.
“Wall Street is maybe expecting not good news from the Fed on Friday and therefore a slowdown, a bad slowdown,” Cramer said.
Jim Cramer said the market is “rational” again and the optimism needed to be “tempered” before the next rally.
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s recommending investors to buy or sell. With each company, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Boeing Co (NYSE:BA)
Number of Hedge Fund Investors: 42
Talking about Boeing in a latest program, Jim Cramer said that the company has taken “advantage” of its market dominance.
“If there were five aircraft makers in this world then I would think Boeing would have been done for and out. But there are only two. Two companies that make large commercial aircraft, which means these guys can afford to make endless mistakes and they have taken advantage of that,” Cramer said.
Cramer expressed faith in Boeing’s new CEO Kelly Ortberg and said that the new executive might be able to save the company. However, Cramer said the company’s balance sheet is “hideous” and it’s not the time to buy the stock.
Cramer has been bullish on Boeing Co (NYSE:BA) despite the disastrous effects of several incidents involving Boeing planes including the Boeing 737 MAX-9. Boeing recently reported quarterly results and as expected the company’s losses deepened. The internet is full of the details of those horrible results. But we want to focus on why the stock could be a buy for the long term and the reasons why Jim Cramer or other Boeing bulls are still hopeful about the stock.
The biggest reason behind this optimism is the new CEO. Kelly Ortberg has a degree in Mechanical Engineering, and brings a technical background to the role, a shift from the accounting-focused leadership that investors have found concerning.
Boeing Co (NYSE:BA) is also increasing production rates, having already increased output and reactivated its third 737 MAX assembly line. The company has submitted a comprehensive plan to the FAA, aiming to surpass the current cap of 38 MAX airplanes per month. While these measures will not immediately impact earnings, they signal Boeing’s commitment to sustainable growth.
On the certification front, Boeing is progressing with solutions for the 737 MAX 7 and MAX 10, and has entered a new phase in the 777X certification campaign. These developments are seen as positive.
Boeing has made progress with the 737 MAX program. Boeing Co (NYSE:BA) has reduced traveled work, leading to cleaner fuselages and improved quality and reliability. Boeing’s submission of a comprehensive safety and quality plan to the FAA marks an important milestone. Production has increased from a low single-digit rate in the first quarter to 25 airplanes per month in June and July, though still short of the target of 38 airplanes per month by year-end. This increase suggests progress in managing manufacturing quality.
Overall, Boeing Co (NYSE:BA) ranks 5th on Insider Monkey’s list titled Jim Cramer Stocks: 10 Latest Calls. While we acknowledge the potential of Boeing Co (NYSE:BA), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
