Recent policy stumbles have some analysts questioning the concept of the Trump Trade in its entirety. But for aerospace giant Boeing Co (NYSE:BA), the Trump Trade is alive and well. And in fact, Trump is directly helping the firm get business and contracts.
For investors, BA remains as solid as ever for the next four years as one of the few Trump Trades still alive and kicking. The time to buy BA stock is now.
A lot has been written about the so-called “Trump Trade” or stocks that will profit from President Trump’s reign as commander in chief. Based on his early policy points and stances, various sectors and stocks supposedly would benefit more than others. That led to high buying in many manufacturing, defense and energy names.
A Trump-Sized Reversal At BA Stock
At first, Boeing looked like an odd choice to play Trump’s accession into the White House. After all, the President criticized BA in a multitude of tweets about the sheer cost of some of its products and how tax-payers were getting fleeced. Those comments, by the way, did managed to hit Boeing stock hard and result in some hefty intra-day losses.
Lately, however, BA and Trump have become BFF’s.
For one thing, Trump’s stance on defense, increasing its budget and his increased rhetoric towards North Korea have only strengthened major defense contractors like Boeing. That alone is worth the price of admission for BA stock.
But Trump is doing more than just signaling “Fire & Fury.” He’s actually getting Boeing future business through trade negotiations.
The latest of which comes from Malaysia. During a scheduled meeting with Malaysian Prime Minister Najib Raza, the President helped negotiate a deal with Malaysia Airlines purchase Boeing aircraft for its state-owned operations. The deal will add twenty-five 737 MAX 10 planes and eight 787 Dreamliners to BA’s backlog and $1.25 billion to its coffers. Moreover, Malaysia Airlines has the option to buy twenty-five additional 737 MAX 10’s in the near future.
All in all, the deal could be worth more than $10 billion in total over the next five years.
What’s great for BA stock is that this isn’t the first time Trump has helped out Boeing. At the beginning of September, Trump reportedly expedited the sale of $5 billion worth of Boeing’s F/A-18 Super Hornets to Kuwait. At the same time, Boeing recently won a $600 million contract with the Pentagon to redesign Air Force One at Trump’s insistence. Finally, the Trump administration has told the U.S Congress that it “strongly supports” the sale of F-18 fighter planes to India in order to help reduce the U.S. trade deficit with the nation.
In short, President Trump is very much adding to Boeing’s backlog, its revenues and, ultimately, its profits.
BA Stock IS The Trump Trade
The Trump Trade has encompassed many manufacturers, but very few have been named directly by the Donald in trade talk. But Boeing has. Time and time again, BA has come up. And not only is there talking, there’s plenty of buying from foreign airlines and governments. Boeing is getting actual deals thanks to the President. If that’s not the definition of a Trump Trade than I don’t know what is. The beauty is that this coming from both commercial and military lines of business.
All of this is before Boeing’s already massive backlog. As of last quarter, there were more than 5,700 commercial airplane jets are waiting in BA’s order books. That provides BA with plenty of long term cash flows and profits that it will use to grow its rich 2.35% dividend and support its healthy buyback habit.
The added Trump bump from any deals he is able to push BA’s way is now icing on the cake.
The Bottom Line
For Investors looking to maximize the ability to profit from the Trump administration, BA stock is the only way to go. The firm is the only one actually being helped by the president and being named in big league deals during trade negations.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.
