Ray Dalio Was Wrong About These 5 Stocks

2. Spirit AeroSystems Holdings, Inc. (NYSE:SPR)

Number of Hedge Fund Holders: 52

Percentage Decline in Share Price (YTD): 28.04%         

Spirit AeroSystems Holdings, Inc. (NYSE:SPR) makes and sells aerostructures. Latest filings show that Bridgewater Associates owned over 6,400 shares of Spirit AeroSystems Holdings, Inc. (NYSE:SPR) at the end of the first quarter of 2022 worth $314,000. 

On May 5, Susquehanna analyst Charles Minervino maintained a Positive rating on Spirit AeroSystems Holdings, Inc. (NYSE:SPR) stock and lowered the price target to $50 from $55, underlining that the firm was facing some production delays. 

At the end of the first quarter of 2022, 52 hedge funds in the database of Insider Monkey held stakes worth $1 billion in Spirit AeroSystems Holdings, Inc. (NYSE:SPR), up from 45 in the previous quarter worth $872 million.

In its Q1 2022 investor letter, Aristotle Capital Management, an asset management firm, highlighted a few stocks and Spirit AeroSystems Holdings, Inc. (NYSE:SPR) was one of them. Here is what the fund said:

“Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is a supplier of aerostructures to several aerospace and defense (A&D) companies, including Boeing, which is its largest customer. The company supplies fuselages, propulsion systems and wings for A&D companies. We expect Spirit to benefit from a recovery in aircraft production which was significantly curtailed over the past few years because of Boeing’s delayed recertification of the 737 MAX, following two major airline crashes. The airline and aerospace industries were also negatively impacted by the coronavirus pandemic, as both travel demand was curtailed and various governments restricted travel by their citizens. Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is focused on improving its margins. The company’s mix of aircraft production should organically increase as a result of more 737 MAX production in the mix. The 737 MAX is Spirit’s most profitable product. Meanwhile, a reduction in 787 MAX production also helps the company’s margin, since Spirit loses money on this program. The company is also automating its manufacturing processes in its factories which should help margins. We expect an improvement in the balance sheet, as profitability improves, and deliveries of aircraft reduce the amount of inventory on the balance sheet. The company produced positive free cash flow in its most recent reported quarter. Consensus earnings estimates are $2.78 and $5.35 for fiscal years 2023 and 2024, respectively. Earnings revisions for 2023 and 2024 appear to have bottomed and begun increasing modestly.”