Three aviation stocks to buy as ways to diversify offer alternatives to Boeing (NYSE: BA) amid its quality control concerns after a Jan. 5 mid-air malfunction…
Three aviation stocks to buy as ways to diversify offer alternatives to Boeing (NYSE: BA) amid its quality control concerns after a Jan. 5 mid-air malfunction of a 737 MAX 9 when a door plug blew off at 16,000 and required an Alaska Airlines (NYSE: ALK) flight to make an emergency landing in Portland, Oregon.
Image of damaged Boeing 737 MAX 9 courtesy of the National Transportation Safety Board
The three aviation stocks to buy offer exposure to an industry currently benefitting from rising demand for air travel as wars are boosting military aerospace needs. Selected aviation stocks could be a good addition to the portfolios of investors who may want to diversify beyond technology stocks.
In 2023, technology stocks rebounded strongly after a dismal 2022 when they averaged a drop of 33%. Buoyed by its concentration in technology stocks, NASDAQ jumped 43% in 2023 to mark its best performance since 2020.
Former pension fund chairman Bob Carlson, who heads the Retirement Watch investment newsletter, advocates diversification and typically recommends funds to help avoid excess exposure to individual stocks. He cautions that the past year’s big winners often cannot repeat the success as investors rotate into other sectors.
Bob Carlson, who heads Retirement Watch, answers questions from Paul Dykewicz.
Three Aviation Stocks to Buy as Ways to Diversify: Heico
Hollywood, Florida-based Heico Corporation (NYSE: HEI), rated as “outperform by the William Blair investment firm in Chicago, announced on Jan. 16 that its Sunshine Avionics subsidiary entered an exclusive perpetual license and acquired key assets from Honeywell (NYSE: HON) to produce, sell and repair Boeing 737NG and Boeing 777 Cockpit Displays and Legacy Displays. Financial terms for the transaction were not disclosed, but Heico leaders said the acquisition would be accretive to earnings in the year after the transaction’s closing.
Last October, VSE Corporation (NASDAQ: VSEC) established a similar licensing agreement with Honeywell for fuel control systems, with VSE paying $105 million for that transaction. The deals show Honeywell’s plan to divest aerospace assets and licenses to other partners like Heico.
In addition, Heico is still in the process of integrating Wencor into its business, wrote Louie DiPalma, an aerospace and defense analyst with William Blair. In that deal, Heico paid $2.1 billion for Wencor.
However, Heico’s management previously had expressed an interest in reducing its debt and not not focusing on acquisitions within its Flight Support Group, DiPalma wrote in a Jan. 16 research note. The valuation of Heico’s shares that trade at 42 times forward year earnings is below its five-year average of 48 times but at a premium to its peers, DiPalma pointed out.
“We believe the premium to peers is warranted because of Heico’s lower leverage relative to competitors, proven business model and high margins,” DiPalma wrote. “In our view, the biggest risk to Heico shares is another COVID-like pandemic reducing demand for air travel.”
Three Aviation Stocks to Buy as Ways to Diversify: Textron
Textron Inc. (NYSE: TXT), of Providence Rhode Island, has a mission of offering innovative defense, government and aerospace technologies and services. With its aim to defend, protect and support its customers, Textron earned a “buy” rating when Citigroup began to cover it last July.
If a recession is thwarted, the potential upside of Textron’s stock at 15-20% during the next 12 months, said Michelle Connell, president and owner of Dallas-based Portia Capital Management, LLC.
“Given the current volatility and nervousness of the market, I would not take any position until specifics on earnings and some signaling on future orders is given,” Connell counseled. With Textron next reporting financial results on Jan. 24, the wait for such guidance will not be long.
Due to its mid-cap status, the stock has gained 11% during the past 12 months. Its mid-cap size did not allow it to participate in the large-cap rally, Connell told me.
Textron’s debt-to-equity ratio is about .49. That manageable debt level is important with interest rates high and the possibility of a recession around the corner, Connell told me.
During the past 10 years, Textron has generated an average $1.125 billion in cash flow each year. Another plus is that the stock was included in the Goldman Sachs (NYSE: GS) 2024 conviction list, with a 22% upside estimate, Connell continued.
Three Aviation Stocks to Buy as Ways to Diversify: General Dynamics
Reston, Virginia-based General Dynamics (NYSE: GD) is an aerospace stock that DiPalma recommends with an “outperform” rating. The company’s technology division has experienced bookings momentum over the past two quarters that should allow it to continue to notch solid growth despite the loss of a computer hardware system (CHS-6) contract with the U.S. Army last September, DiPalma wrote in a Jan. 11 research note. At the same time, the Gulfstream G700 certification slipped out of the fourth quarter and will pressure fourth-quarter earnings, he continued.
“In our view, the G700 delay is related to timing rather than any quality concerns,” DiPalma wrote. “We expect General Dynamics’ shares to have a strong 2024 as supply chain constraints ease.”
General Dynamics has more than 100,000 employees in 70-plus countries. A key business unit of General Dynamics is Gulfstream Aerospace Corporation, a manufacturer of business aircraft. Other segments of General Dynamics focus on heavy mobile military equipment such as Abrams tanks, Stryker fighting vehicles, ASCOD fighting vehicles like the Spanish PIZARRO and British AJAX, LAV-25 Light Armored Vehicles and Flyer-60 lightweight tactical vehicles.
For the U.S. Navy and other allied armed forces, General Dynamics builds Virginia-class attack submarines, Columbia-class ballistic missile submarines, Arleigh Burke-class guided missile destroyers, Expeditionary Sea Base ships, fleet logistics ships, commercial cargo ships, aircraft and naval gun systems, Hydra-70 rockets, military radios and command and control systems. In addition, the company provides radio and optical telescopes, secure mobile phones, PIRANHA and PANDUR- wheeled armored vehicles and mobile bridge systems.
Two-Man Team Profits with Aviation and Aerospace Stocks
A pair of proponents of aviation and aerospace stocks are Mark Skousen, PhD, and seasoned stock picker Jim Woods. The two-man team heads the Fast Money Alert advisory service. They recently took a profit in their recent recommendation of Lockheed Martin (NYSE: LMT) in Fast Money Alert. LMT is a alternative way to invest in aviation and aerospace without the drama Boeing will be incurring in the months ahead as regulators look to identify the root cause of the in-flight Boeing 737 MAX 9 emergency and require manufacturing reforms to prevent any recurrence.
Mark Skousen, a scion of Ben Franklin, meets with Paul Dykewicz.
Jim Woods, a former U.S. Army paratrooper, co-heads Fast Money Alert.
Military Demand Soars Amid Wars
The U.S. military faces an acute need to adopt innovation, to expedite implementation of technological gains, to tap into the talents of people in various industries and to step-up collaboration with private industry and international partners to enhance effectiveness, U.S. Joint Chiefs of Staff Gen. Charles Q. Brown Jr. told attendees on Nov 16 at a national security conference. Prime examples of the need are raging wars in Ukraine and the Middle East, as well as a cold war involving China and its strained relationships with Taiwan and other Asian nations.
The shocking Oct. 7 attack by Hamas on Israel triggered ongoing fighting in the Middle East, coupled with Russia’s February 2022 invasion and continuing assault of neighboring Ukraine. Those brutal military conflicts show the fragility of peace when determined aggressors are willing to use any means to achieve their goals. To fend off such attacks, rapid and effective response is required.
“The Department of Defense is doing more than ever before to deter, defend, and, if necessary, defeat aggression,” Gen. Brown said at the national security conference held at Johns Hopkins University.
Russia’s 360-foot-long Novocherkassk war ship was damaged on Dec. 26 by a Ukrainian attack on a Black Sea port in Crimea. This video shows the ship exploding at the port when struck by aircraft-guided missiles.
Chairman Joint Chiefs of Staff Gen. Charles Q. Brown, Jr. Photo By: Benjamin Applebaum
National security threats can require immediate action, Gen. Brown said he quickly learned since taking his post on Oct. 1.
“We may not have much warning when the next fight begins,” Gen. Brown said. “We need to be ready.”
In a pre-recorded speech, Michael R. Bloomberg, founder of Bloomberg LP, told the John Hopkins attendees of a critical need for collaboration between government and industry.
“Building enduring technological advances for the U.S. military will help our service members and allies defend freedom across the globe,” Bloomberg remarked before the National Security Innovation Forum at the Johns Hopkins University Bloomberg Center.
Michael Bloomberg, philanthropist and founder of Bloomberg L.P.
The “horrific terrorist attacks” against Israel and civilians living there on Oct. 7 underscore the importance of that mission, Bloomberg added.
The three aviation stocks to buy as ways to diversify provide alternative paths to profit than technology stocks that tend to rise and fall faster than most other sectors.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Attention Gift Buyers! Consider purchasing Paul’s inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz.The uplifting book is great gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for special pricing on multiple-book purchases or autographed copies! Follow Paul on Twitter @PaulDykewicz. He is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper, after writing for the Baltimore Business Journal and Crain Communications.
It was Jan. 11, 2024 when software giant Microsoft (MSFT) briefly passed Apple (AAPL) as the most valuable company in the world.
Microsoft's stock closed 0.5% higher, giving it a market valuation of $2.859 trillion.
It rose as much as 2% during the session and the company was briefly worth $2.903 trillion. Apple closed 0.3% lower, giving the company a market capitalization of $2.886 trillion.
"It was inevitable that Microsoft would overtake Apple since Microsoft is growing faster and has more to benefit from the generative AI revolution," D.A. Davidson analyst Gil Luria said at the time, according to Reuters.
The two tech titans have jostled for top spot over the years and Microsoft was ahead at last check, with a market cap of $3.085 trillion, compared with Apple's value of $2.684 trillion.
Analysts noted that Apple had been dealing with weakening demand, including for the iPhone, the company’s main source of revenue.
Demand in China, a major market, has slumped as the country's economy makes a slow recovery from the pandemic and competition from Huawei.
Sales in China of Apple's iPhone fell by 24% in the first six weeks of 2024 compared with a year earlier, according to research firm Counterpoint, as the company contended with stiff competition from a resurgent Huawei "while getting squeezed in the middle on aggressive pricing from the likes of OPPO, vivo and Xiaomi," said senior Analyst Mengmeng Zhang.
“Although the iPhone 15 is a great device, it has no significant upgrades from the previous version, so consumers feel fine holding on to the older-generation iPhones for now," he said.
A man scrolling through Netflix on an Apple iPad Pro. Photo by Phil Barker/Future Publishing via Getty Images.
Counterpoint said that the first six weeks of 2023 saw abnormally high numbers with significant unit sales being deferred from December 2022 due to production issues.
Apple is planning to open its eighth store in Shanghai – and its 47th across China – on March 21.
The company also plans to expand its research centre in Shanghai to support all of its product lines and open a new lab in southern tech hub Shenzhen later this year, according to the South China Morning Post.
Meanwhile, over in Europe, Apple announced changes to comply with the European Union's Digital Markets Act (DMA), which went into effect last week, Reuters reported on March 12.
Beginning this spring, software developers operating in Europe will be able to distribute apps to EU customers directly from their own websites instead of through the App Store.
"To reflect the DMA’s changes, users in the EU can install apps from alternative app marketplaces in iOS 17.4 and later," Apple said on its website, referring to the software platform that runs iPhones and iPads.
"Users will be able to download an alternative marketplace app from the marketplace developer’s website," the company said.
Apple has also said it will appeal a $2 billion EU antitrust fine for thwarting competition from Spotify (SPOT) and other music streaming rivals via restrictions on the App Store.
The company's shares have suffered amid all this upheaval, but some analysts still see good things in Apple's future.
Bank of America Securities confirmed its positive stance on Apple, maintaining a buy rating with a steady price target of $225, according to Investing.com.
The firm's analysis highlighted Apple's pricing strategy evolution since the introduction of the first iPhone in 2007, with initial prices set at $499 for the 4GB model and $599 for the 8GB model.
BofA said that Apple has consistently launched new iPhone models, including the Pro/Pro Max versions, to target the premium market.
Analyst says Apple selloff 'overdone'
Concurrently, prices for previous models are typically reduced by about $100 with each new release.
This strategy, coupled with installment plans from Apple and carriers, has contributed to the iPhone's installed base reaching a record 1.2 billion in 2023, the firm said.
Apple has effectively shifted its sales mix toward higher-value units despite experiencing slower unit sales, BofA said.
This trend is expected to persist and could help mitigate potential unit sales weaknesses, particularly in China.
BofA also noted Apple's dominance in the high-end market, maintaining a market share of over 90% in the $1,000 and above price band for the past three years.
The firm also cited the anticipation of a multi-year iPhone cycle propelled by next-generation AI technology, robust services growth, and the potential for margin expansion.
On Monday, Evercore ISI analysts said they believed that the sell-off in the iPhone maker’s shares may be “overdone.”
The firm said that investors' growing preference for AI-focused stocks like Nvidia (NVDA) has led to a reallocation of funds away from Apple.
In addition, Evercore said concerns over weakening demand in China, where Apple may be losing market share in the smartphone segment, have affected investor sentiment.
And then ongoing regulatory issues continue to have an impact on investor confidence in the world's second-biggest company.
“We think the sell-off is rather overdone, while we suspect there is strong valuation support at current levels to down 10%, there are three distinct drivers that could unlock upside on the stock from here – a) Cap allocation, b) AI inferencing, and c) Risk-off/defensive shift," the firm said in a research note.
Major typhoid fever surveillance study in sub-Saharan Africa indicates need for the introduction of typhoid conjugate vaccines in endemic countries
There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high…
There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.
Credit: IVI
There is a high burden of typhoid fever in sub-Saharan African countries, according to a new study published today in The Lancet Global Health. This high burden combined with the threat of typhoid strains resistant to antibiotic treatment calls for stronger prevention strategies, including the use and implementation of typhoid conjugate vaccines (TCVs) in endemic settings along with improvements in access to safe water, sanitation, and hygiene.
The findings from this 4-year study, the Severe Typhoid in Africa (SETA) program, offers new typhoid fever burden estimates from six countries: Burkina Faso, Democratic Republic of the Congo (DRC), Ethiopia, Ghana, Madagascar, and Nigeria, with four countries recording more than 100 cases for every 100,000 person-years of observation, which is considered a high burden. The highest incidence of typhoid was found in DRC with 315 cases per 100,000 people while children between 2-14 years of age were shown to be at highest risk across all 25 study sites.
There are an estimated 12.5 to 16.3 million cases of typhoid every year with 140,000 deaths. However, with generic symptoms such as fever, fatigue, and abdominal pain, and the need for blood culture sampling to make a definitive diagnosis, it is difficult for governments to capture the true burden of typhoid in their countries.
“Our goal through SETA was to address these gaps in typhoid disease burden data,” said lead author Dr. Florian Marks, Deputy Director General of the International Vaccine Institute (IVI). “Our estimates indicate that introduction of TCV in endemic settings would go to lengths in protecting communities, especially school-aged children, against this potentially deadly—but preventable—disease.”
In addition to disease incidence, this study also showed that the emergence of antimicrobial resistance (AMR) in Salmonella Typhi, the bacteria that causes typhoid fever, has led to more reliance beyond the traditional first line of antibiotic treatment. If left untreated, severe cases of the disease can lead to intestinal perforation and even death. This suggests that prevention through vaccination may play a critical role in not only protecting against typhoid fever but reducing the spread of drug-resistant strains of the bacteria.
There are two TCVs prequalified by the World Health Organization (WHO) and available through Gavi, the Vaccine Alliance. In February 2024, IVI and SK bioscience announced that a third TCV, SKYTyphoid™, also achieved WHO PQ, paving the way for public procurement and increasing the global supply.
Alongside the SETA disease burden study, IVI has been working with colleagues in three African countries to show the real-world impact of TCV vaccination. These studies include a cluster-randomized trial in Agogo, Ghana and two effectiveness studies following mass vaccination in Kisantu, DRC and Imerintsiatosika, Madagascar.
Dr. Birkneh Tilahun Tadesse, Associate Director General at IVI and Head of the Real-World Evidence Department, explains, “Through these vaccine effectiveness studies, we aim to show the full public health value of TCV in settings that are directly impacted by a high burden of typhoid fever.” He adds, “Our final objective of course is to eliminate typhoid or to at least reduce the burden to low incidence levels, and that’s what we are attempting in Fiji with an island-wide vaccination campaign.”
As more countries in typhoid endemic countries, namely in sub-Saharan Africa and South Asia, consider TCV in national immunization programs, these data will help inform evidence-based policy decisions around typhoid prevention and control.
###
About the International Vaccine Institute (IVI)
The International Vaccine Institute (IVI) is a non-profit international organization established in 1997 at the initiative of the United Nations Development Programme with a mission to discover, develop, and deliver safe, effective, and affordable vaccines for global health.
IVI’s current portfolio includes vaccines at all stages of pre-clinical and clinical development for infectious diseases that disproportionately affect low- and middle-income countries, such as cholera, typhoid, chikungunya, shigella, salmonella, schistosomiasis, hepatitis E, HPV, COVID-19, and more. IVI developed the world’s first low-cost oral cholera vaccine, pre-qualified by the World Health Organization (WHO) and developed a new-generation typhoid conjugate vaccine that is recently pre-qualified by WHO.
IVI is headquartered in Seoul, Republic of Korea with a Europe Regional Office in Sweden, a Country Office in Austria, and Collaborating Centers in Ghana, Ethiopia, and Madagascar. 39 countries and the WHO are members of IVI, and the governments of the Republic of Korea, Sweden, India, Finland, and Thailand provide state funding. For more information, please visit https://www.ivi.int.
Incidence of typhoid fever in Burkina Faso, Democratic Republic of the Congo, Ethiopia, Ghana, Madagascar, and Nigeria (the Severe Typhoid in Africa programme): a population-based study
We’ve added 60% to national debt since 2018. Germany - a country with major economic woes - added ‘just’ 32%.
Maybe it will never matter. Maybe MMT is real. Maybe we just cancel or inflate it out. Maybe career real estate borrowers or career politicians aren’t the answer.
I have no idea. Only time will tell. But it’s going to be fascinating to watch it play out.
He is right: it will be fascinating, and the latest budget deficit data simply confirmed that the day of reckoning will come very soon, certainly sooner than the two years that One River's Eric Peters predicted this weekend for the coming "US debt sustainability crisis."
According to the US Treasury, in February, the US collected $271 billion in various tax receipts, and spent $567 billion, more than double what it collected.
The two charts below show the divergence in US tax receipts which have flatlined (on a trailing 6M basis) since the covid pandemic in 2020 (with occasional stimmy-driven surges)...
... and spending which is about 50% higher compared to where it was in 2020.
The end result is that in February, the budget deficit rose to $296.3 billion, up 12.9% from a year prior, and the second highest February deficit on record.
And the punchline: on a cumulative basis, the budget deficit in fiscal 2024 which began on October 1, 2023 is now $828 billion, the second largest cumulative deficit through February on record, surpassed only by the peak covid year of 2021.
But wait there's more: because in a world where the US is spending more than twice what it is collecting, the endgame is clear: debt collapse, and while it won't be tomorrow, or the week after, it is coming... and it's also why the US is now selling $1 trillion in debt every 100 days just to keep operating (and absorbing all those millions of illegal immigrants who will keep voting democrat to preserve the socialist system of the US, so beloved by the Soros clan).
... having already surpassed total US defense spending and soon to surpass total health spending and, finally all social security spending, the largest spending category of all, which means that US debt will now rise exponentially higher until the inevitable moment when the US dollar loses its reserve status and it all comes crashing down.
We conclude with another observation by CNBC's Brian Sullivan, who quotes an email by a DC strategist...
.. which lays out the proposed Biden budget as follows:
The budget deficit will growth another $16 TRILLION over next 10 years. Thats *with* the proposed massive tax hikes.
Without them the deficit will grow $19 trillion.
That's why you will hear the "deficit is being reduced by $3 trillion" over the decade.
No family budget or business could exist with this kind of math.
Of course, in the long run, neither can the US... and since neither party will ever cut the spending which everyone by now is so addicted to, the best anyone can do is start planning for the endgame.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
