investingfromtheright

I am retired and take educated guesses on all things financial.

September 24, 2006

September 25. 2006: Stats and Stocks

Thanks to all who have visited this blog over the past month, and to those financial bloggers whom have written kindly of this site. To date, over 5,200 visitors have clicked here to be informed, amused - or both. Before I feel too smug, the following stats are the August comScores for search engines:

Google 2,810,802,000 44.1%
Yahoo 1,897,328,000 28.7%
MSN/Msft 811,671,000 12.1%
AOL 359,627,000 5.6%
ASK 358,247,000 5.5%

Now, stocks.

Days ago, I spent space detailing successes of AeroDefense companies securing military contracts, and resultant stock picks. For the record, I do have access to military purchases prior to reaching some analyst desks. Since Defense stocks should do well in any political environment considering the state of world affairs, I look on these as good long term investments so long as the investor remains on top of who is doing what, and to whom.

Boeing (BA) is an excellent pick at this time, along with its major subcontractors such as Goodrich (GR), LLL and DRS.General Electric(GE) will profit handsomely as well, but since it is in so many other businesses, I defer purchase of the stock.Poor Airbus!I do NOT recommend that any ETF's or mutual funds using defense sector investing be purchased as there are too many companies that will do poorly. Only a few will succeed.

One reason Boeing and its minions will do well is the current age of the world commercial fleet:

0-5 years 17%
6-10 years 20%
11-15years 25%
16-20years 19%
21-25years 7%
25+ years 12%

According to a respected analyst out of the mainstream: Between replacement requirements and expected long-term traffic growth of approximately 5% annually, the view is that demand environment for commercial aircraft will be robust, especially given the fuel efficiencies of new aircraft. Military aircraft spectrums will grow faster, not counting overhauls and upgrades.

This past week, Boeing won a 2.5 billion/5 year contract for the DHS SBI-Net program, and the Boeing/LMT ULA-JV deal as said to be nearing government approval, terms to be reckoned shortly. This could be a mid-multi-billion dollar deal.

The purchase of Avial (AVL) by Boeing secures that company a first-rate commercial and military aircraft repair base for years to come. I think it was a superb acquisition, especially since I owned AVL stock which appreciated 53% in three months.The other aircraft maintenance company is Swire-Pacific out of Hong Kong. I recommend this stock for a variety of reasons, not just aircraft maintenance.

This past week, amidst the insanity at the United Nations, respected columnist Robert Novak predicted that the Republicans will retain control of both House and Senate, by thin margins. This is subject to change on a weekly basis.It is a significant pronouncement which is 180 degrees different than predicted a few weeks ago. I think this is a good thing.

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