I'll bet you've heard of this company many times...
But I doubt you are aware of how important it is.
I learned long ago to have this stock on my radar at all times.
And after you hear what I have to say about it, I think youwill
You see, there is an endless stream of data investors can use to
help predict the economic weather... manufacturing
utilization,durable goods orders, you name it.
But over the years, I have found one company to be an especially
reliable barometer -- especially when it comes to investing in
In fact, by using this company as an indicator, subscribers to
Scarcity and Real Wealth
who followed my "buy" recommendation on Nov. 2 pocketed a 42%
return six trading days later.
So what makes this company an economicbellwether for industrial
metals demand? Simple. It's product line. Specifically, the size
and scale of those products. You see, a single one can tip the
scales at 250,000 pounds after it leaves the assembly line. It
takes a lot of raw materials to manufacture something that big --
135 miles of copper wiring and more than 1,000 sheets of riveted
aluminum, to be exact.
And it's not just copper and aluminum being used. Molybdenum is
also a key ingredient, along with cobalt and titanium. In fact,
titanium accounts for 15% of the construction materials for the
company's latest 787 Dreamliner airplanes.
With five different metals going into each airplane,
sales are an excellent way to gauge demand for these critical
natural resources. And right now, the needle on that gauge is
pushing strongly in the right direction.
Boeing posted third-quarterearnings of $1.35 per share,
outpacingWall Street 's $1.12 target. For the record, this is the
fifth consecutive quarter that the aerospace giant has earned more
than themarket anticipated.
And management likes what it sees on the horizon. The company
raised its full-year earnings forecast (for the third time) to as
much as $4.95 per share, up from a prior outlook of between $4.40
and $4.60 per share.
Furthermore, Boeing's production plants are running at full
speed. The company delivered 149 commercial airplanes last quarter,
a solid 17% increase from a year ago. More important, the company
booked more than twice that number (369) in new orders during the
Those new orders lifted thebacklog to 4,100 planes awaiting
construction. That backlog is valued at $307 billion. And Boeing
isn't exactly the only plane-maker in town. European rival Airbus
also has its hands full, and Canada's Bombardier recently landed
the biggest order in company history.
Boeing's latest forecast indicates that
and other carriers in North America will have to order 7,290 new
planes during the next 20 years to replace aging jets and expand
their fleets to accommodate demand. Those planes could carry
amarket value of $820 billion.
And that's just in North America. The numbers grow even larger
when you include booming air travel inemerging markets ,
particularly Asia. China alone has outlined plans to build as many
as 70 new airports just within the next three years as millions
more travelers take to the skies.
Bottom line : Partly to reduce fuel expenses, partly to replace
outdated models, and partly to put more seats in the sky, there is
a sustained boom in airplane construction that could last for the
rest of this decade.
Boeing may be a great addition to any portfolio, especially
considering its backlog. But a company with a $55 billionmarket cap
isn't going to move the needle over night.
And while nothing is guaranteed, as this boom continues I
believe there will be sustained demand for the precious metals used
to make each plane... and rising share prices for the companies
that produce those metals.
And I am not the only one who likes what they are seeing in
Action to Take -->
One producer that I had my eye on was
Titanium Metals (NYSE:
. I recommended this stock to my subscribers on Nov. 2 based on
this Boeing test. Shortly thereafter, the stock jumped 42% in one
Precision Castparts (NYSE:
made a takeoveroffer . I followed up with readers that day, telling
them that I was cashing in on my gains.
Precision Castparts is benefiting from many of the same
aerospace growth drivers as Titanium Metals and is a company worth
keeping your eye on.
-- Nathan Slaughter
P.S. -- The metals used in airplanes aren't the only commodities
in demand. Right now, because of a bizarre event at the end of
2013, we could be headed for a major supply shortage in a precious
mineral used every day. Almost nobody is talking about it, but 31
million Americans could be affected. There is no reason to be
fearful, but there could be an opportunity for huge profits. Click
here to view my presentation on the looming crisis.
Nathan Slaughter does not personally hold positions in any
securities mentioned in this article. StreetAuthority LLC owns
shares of TIE in one or more of its "real money" portfolios.
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