Boeing: Blue Chip or Cow Chip?

When Blue Chips Go Bad: What Should Investors Do With Boeing?
Excerpt:

[Boeing] is in the universe of quality stocks they follow. While there is no way of knowing how long problems will plague this new plane, how quickly the cause can be identified or how costly repairs will be, Smith says so far this issue looks to be short-term in nature and not something that threatens long-term earnings growth or compromises its financial strength.

"You have to factor in if a company's balance sheet is getting compromised because of its difficulties," Smith says, adding that the 787 is only one of many products sold by Boeing, albeit an important one. "Right now we have put this in the category of a short-term problem not the beginning of a long term obstacle, but that could change."

To be fair, Boeing is not the only "blue chip turned cow chip," as Smith characterizes it. In fact, there are three members of the Dow Jones Industrials that are technically in their own private bear markets right now, having fallen more than 20% from their 52-week highs. They are Hewlett Packard (HPQ) -42%, Intel (INTC) -25%, and DuPont (DD) -20%, and Smith says only one of them is on his cow chip list, so to speak.

"We like both DuPont and Intel and see their problems more as short-term headwinds," Smith says, while calling Hewlett Packard's plight one of secular, long-term challenges, as well as management issues.

Comment: We bought it in June '11. Down $ .30 per share since then. Holding onto. I agree that HPQ is "cow chip". For those not familiar with farming: Cow Chip

The Dreamliner

The 787 takes flight, and lives up to its promise

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ABOARD ALL NIPPON AIRWAYS FLIGHT 7871 (AP) -- It's the plane that is supposed to change the experience of flying.

No more stuffy noses, dry throats or severe fatigue. Larger windows to provide a stronger connection to the world outside. And mood lighting that can either ease jet lag or turn the plane into a nightclub at 40,000 feet.

And for the most part, Boeing's 787 succeeds. Flying it is more enjoyable. But it's still flying. Just because the plane is new doesn't mean the food will taste better or you won't be stuck in front of a kicking kid.

There has been plenty of hype surrounding the 787, a long-range plane marketed as The Dreamliner that carried its first passengers Wednesday on a four-hour flight from Tokyo to Hong Kong. It has been called "revolutionary" and "a game-changer."

And, indeed, a sleek design makes the plane stand out the moment you step on board. A higher ceiling -- at least the perception of one -- reduces claustrophobia. And natural light pours in, creating a welcoming feeling.

Maybe that 10-hour flight won't be so bad after all. Maybe.

Comment: Not sure why Boeing can make money but the airlines cannot (eg American). A broken business model I guess. (One of my investments is in BA)

Boeing on Obamacare: Boing! Boing!

Citing health care law, Boeing pares employee plan

Excerpt:

Aerospace giant Boeing is joining the list of companies that say the new health care law could have a potential downside for their workers.

In a letter mailed to employees late last week, the company cited the overhaul as part of the reason it is asking some 90,000 nonunion workers to pay significantly more for their health plan next year. A copy of the letter was obtained Monday by The Associated Press.

"The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years," wrote Rick Stephens, Boeing's senior vice president for human resources.

Boeing is the latest major employer to signal a shift for its workers as a result of the legislation, which expands coverage to more than 30 million uninsured people and ranks as President Barack Obama's top domestic achievement. Earlier, McDonald's had raised questions about whether a limited benefit plan that serves some 30,000 of its employees would remain viable under the law. That prompted the administration to issue McDonald's a waiver from certain requirements under the law.

Spokeswoman Karen Forte said the Boeing plan is more generous than what its closest competitors offer, and the company was concerned it would get hit with a new tax under the law.

Comment: So much for health care reform!