Cyclical manufacturers—1 buy & 1 hold

Article Excerpt

Boeing and Ford are highly cyclical manufacturing companies. That means their shares and earnings tend to rise and fall with overall business and economic cycles. For new buying we prefer Ford, which trades at a much lower p/e than Boeing. When the economy slows, Boeing’s high multiple could spur a sharp drop in its share price. BOEING CO. $352 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 591.1 million; Market cap: $208.1 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.boeing.com) is a leading maker of airliners, military aircraft and satellites. Boeing’s revenue in the quarter rose 8.9%, to $25.4 billion from $23.3 billion a year earlier. Earnings soared 94.3%, to $4.80 from $2.47. However, the latest results included a $1.74-a-share gain related to recent changes to the U.S. tax code. The company is now trying to acquire controlling interest in Brazilian aircraft maker Embraer SA (New York symbol ERJ). That would give it access…