The Boeing Company (BA): How Could This Stock Harm Your Portfolio?

The regional carrier offers an attractive investment prospectus because the growth is imminent. Not only is the carrier ordering more aircraft, but it is recruiting more employees as well. It is clear that the board of directors is confident in the carrier’s revenue-generation ability, and investors should be too.

Lastly, the company has inaugurated nine new routes from Dallas/Fort Worth, Philadelphia, and Houston. These routes may take some market share from American Airlines and United Continental Holdings Inc (NYSE:UAL) because Spirit Airlines Incorporated (NASDAQ:SAVE) usually offers cheaper alternatives to passengers. Investors should look for revenue jumps in the third quarter’s earnings report to determine the success of the new routes.

The company trades with a P/E of 21.0, also below the industry’s average of 32.9. According to its most recent earnings report, revenues rose by 20% to $370 million, and its net income rose by 50% to $31 million.

What a fool believes

The Boeing Company (NYSE:BA) is under the spot again due to the incident at the London Heathrow Int. Airport involving a B787 Dreamliner. The aircraft caught fire, and the officials are still looking for clues as to what may have triggered the fire. Investors should remain cautious and avoid initiating positions in this stock for the time being until a resolution is given. It may be that the Dreamliners are grounded again, which may cause considerable losses to the company. My best recommendation would be to wait for the waters to calm before taking any action.

However, if investors want to gain exposure to the airline industry, they can invest in airlines. U.S. Airways and Spirit Airlines Incorporated (NASDAQ:SAVE) may bring capital appreciation to their investors in the near future. The companies show signs of growth by the acquisition of new aircraft, inauguration of new routes, and creation of new jobs. For these reasons, investors may opt for going long in these stocks in growth-oriented portfolios.

The article How Could This Stock Harm Your Portfolio? originally appeared on Fool.com and is written by Robinson Roacho.

Robinson Roacho has no position in any stocks mentioned. The Motley Fool owns shares of SPIRIT AIRLINES INC. (NASDAQ:SAVE). Robinson 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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