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VIDEOBoeing to Up Its 737 Production
Raising production is a good sign as it isn't something management would likely do unless it were fairly confident about the future.
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Here’s what I'm seeing this morning:
Boeing (BA):
The airplane maker was out with a release yesterday that gained lots of attention. The company said it’s going to up its production on the 737 to a hefty 35/month starting in 2012.
My thoughts:
1. Raising production on something of this nature isn't something management would likely do unless it were fairly confident about the future.
2. I continue to think Boeing is the smartest way to wager long-term on the need for commercial air travel. Its defense business is another space where it can be a shining star because of its deep pockets and proven ability to generate aircraft that can make America’s foes run for their mamas.
3. All that said, the shares received a nice bump up in yesterday's session, and I'd probably wait for a bit of a pullback to take a closer look.
IGT Technology (IGT):
Justin Sharon reports in his article that Goldman cut its rating on the company to Sell.
My thoughts:
1. The Nevada-based gaming-equipment company has beat estimates in three of the last four quarters according to the data, which certainly catches my attention. But at a bit over 22 times this year's estimate, it seems pretty fairly priced. Absent a catalyst, I think the near-term upside for the stock could be limited.
2. A pullback under $17 might make my ears perk up. According to the data I see, an insider bought 3,000 shares earlier this year at $16.93.
Caterpillar (CAT):
Justin Sharon points out in Upgrades and Downgrades: Caterpillar in Catbird Seat that Jefferies placed a Buy rating on the company.
This is a stock that still has some nice upside potential. Besides its legendary name, I'm seeing data that shows that estimates have risen for this year and next year (over the last 90 days). It’s also been exceeding estimates, and I'm speculating that the $3.15 estimate for this year could be topped. A nod from Jefferies would merely be icing on the cake.
Starwood Hotels (HOT):
Justin Sharon also mentions that Soleil upped its rating on Starwood to Buy.
I sense the upgrade could give the shares a boost in today's session. However, while I think this is a great company, it looks a bit too pricey for me at more than 36 times next year's estimate. For the record, Marriott (MAR) interests me more, but I'd rather wait to see if that stock pulled back to the upper $20s before taking a closer glance.
Have a great day!
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