SAFRF

Boeing In Negative Headlines Again; Part of 737 Max Fuselage Blows Out During Commercial Flight

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  Image: Boeing’s shares have been quite volatile the past couple years. By Brian Nelson, CFA On January 6, Boeing (BA) received some more bad news. Part of a fuselage installed on one of its new eight-week old 737 Max 9 aircraft blew out on an Alaska Airlines (ALK) flight. There were no reported injuries because of the mishap, but understandably passengers were undoubtedly shaken up. Some posted videos of the experience. Boeing had been working hard to get back on track with customer perception of the safety of its 737 MAX line-up, and we view the incident as yet another hiccup in the firm’s relations with the public. Key Boeing supplier Spirit AeroSystems (SPR) installed the part on the … Read more

General Electric Provides Upbeat Outlook for 2021

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Image Shown: An overview of GE’s cash flow forecasts on a divisional basis for 2021. Image Source: General Electric – Fourth Quarter of 2020 IR Earnings Presentation By Callum Turcan The ongoing coronavirus (‘COVID-19’) has weighed negatively on the industrial sector for most of 2020, before the space started to recover during the latter part of the year. On January 26, industrial conglomerate General Electric Company (GE) reported fourth quarter earnings for 2020 that beat consensus top-line estimates but missed consensus bottom-line estimates. The company’s business operating segments are broken down into its various GE Industrial divisions (‘Power,’ ‘Renewable Energy,’ ‘Aviation’ and ‘Healthcare’) and GE Capital. What really impressed us was that GE Industrial’s free cash flow came in at … Read more

Lockheed Makes an Intriguing Acquisition

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Image Source: Lockheed Martin Corporation – December 2020 IR Presentation covering Lockheed Martin Corporation’s pending acquisition of Aerojet Rocketdyne Holdings Inc By Callum Turcan On December 20, Lockheed Martin Corporation (LMT) announced it was acquiring Aerojet Rocketdyne Holdings Inc (AJRD) for $56.00 per share in cash, or $51.00 per share after taking into account a special $5.00 per share pre-closing cash dividend payment that Aerojet Rocketdyne plans to pay out. The deal has a total equity value of ~$5 billion when including the special dividend component and is expected to close in the second half of 2021. In our view, this deal is highly complementary to Lockheed Martin’s existing operations. Combining Aerojet Rocketdyne’s propulsion and power systems business segments with … Read more

Honeywell Is a Tremendously Resilient Enterprise and a Rock-Solid Dividend Payer

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Image Shown: Honeywell International Inc expects its financial performance will post a significant rebound in 2021. Please note this guidance assumed a safe and viable COVID-19 vaccine would get distributed by early-2021, though distribution activities started before then in December 2020, which supports Honeywell’s near-term outlook. Image Source: Honeywell International Inc – Third Quarter of 2020 IR Earnings Presentation By Callum Turcan We added one of our favorite industrial stocks Honeywell International Inc (HON) to the Dividend Growth Newsletter portfolio on November 27 (link here) as the firm’s operational and financial performance has proven to be incredibly resilient in the face of the ongoing coronavirus (‘COVID-19’) pandemic. As global health authorities begin to put an end to the pandemic, aided … Read more

Structural Changes in the Airline and Aerospace Business

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Image Source: Valuentum A version of this article appeared on our website April 28, 2021. By Brian Nelson, CFA The coronavirus pandemic (“COVID-19”) has fundamentally changed how companies do business. Zoom Video (ZM) has made in-person meetings largely redundant while innovative digital-agreement firms such as DocuSign (DOCU) have only contributed to the “anywhere economy.” Though there may be pent-up demand for in-person meetings and handshake agreements as the number of vaccinations for COVID-19 increase across the globe, many businesses may grow to permanently embrace the “anywhere economy” for its efficiencies and cost savings. This will impact the long-term trajectory of business air travel demand, in our opinion, with implications on the normalized intrinsic values of airlines (JETS), jet makers, and … Read more