Precision Castparts Corp. (PCP): The Latest Aerospace Play Gives Earnings

Therefore, it is not surprising that Boeing has been beating estimates and looks set to continue. Naturally, the aviation industry will never truly escape being cyclical, but as long as the global economy remains on track, it is a sector that can outperform. This is good news for Boeing, Precision Castparts Corp. (NYSE:PCP), and other players like cabin manufacturer B/E Aerospace Inc (NASDAQ:BEAV).

The latter is one of the most interesting names in the aerospace sector, and offers a rare way to get pure exposure to commercial aerospace. Its growth prospects rely on a mix of retrofit a,d new build demand. In addition, it is a key beneficiary of the trend towards wide bodied aircraft, and has a number of new innovations, like its lavatory system for the 737 which allows airlines to gain a few extra seats. However, I think its key plus point relates to the profitability of airlines. If the industry is on a more sustainable path, then airlines will be better positioned financially in order to retrofit planes, rather allow them to depreciate.

Where next?

On a stock specific basis, this means that companies like Precision Castparts Corp. (NYSE:PCP) can continue to outperform. It offers a combination of upside from a ramp-up in production, plus synergy opportunities. Both activities can increase margins going forward.  Similarly, something like B/E Aerospace Inc (NASDAQ:BEAV) is going to benefit from more favorable industry financials. The Boeing Company (NYSE:BA) is an obvious momentum play. If you are bullish on the global economy and particularly emerging markets, then all these stocks represent attractive propositions.

The article The Latest Aerospace Play Gives Earnings originally appeared on Fool.com and is written by Lee Samaha.

Lee Samaha has no position in any stocks mentioned. The Motley Fool recommends Precision Castparts. Lee is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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