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Boeing stock might be taking a beating right now, but investors should be licking their lips at the prospect of picking up the company’s shares at a bargain price.
moneymorning.com/wp-content/blogs.dir/1/files/2019/01/boeing-75×49.jpg 75w” sizes=”(max-width: 200px) 100vw, 200px” title=”dow jones industrial average” />Over the last month, shares of Boeing Co. (NYSE: BA) have fallen over 15% as the company battled controversy following the crashes of its Boeing 737 Max 8 airliner.
We shouldn’t be surprised. Wall Street tends to put a company on the chopping block anytime there’s the slightest hint of bad news.
However, they’re letting fear get the best of them.
You see, while frantic headlines have pushed the herd away from Boeing, the company’s underlying financials suggest that this titan of the airline and defense industries is still a great buy.
Today, we’ll show you why you should pick up Boeing stock while everyone else is looking in the other direction…
Boeing Can Weather the PR Storm
At the beginning of March, BA stock was riding high on strong international demand and robust production numbers.
However, following two Boeing 737 Max 8 jet crashes, the company shares have plummeted over $60 as fear-mongering headlines drive investors toward supposedly greener pastures.
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We certainly aren’t diminishing the tragedy behind these crashes. We also recognize Boeing’s responsibility to fix its software malfunction before putting the planes into operation. But from a pure moneymaking perspective, savvy investors have seen this play before.
You see, Boeing is far from the first company to go through a dramatic public relations crisis that’s tanked its stock, only to see it surge back to life later.
In fact, some of the biggest names on Wall Street have weathered media disasters and left skittish investors kicking themselves on the other side.
Just take Starbucks Co. (NASDAQ: SBUX).
Last April, Starbucks was rocked by controversy after the company was accused of racially profiling customers at one of its Philadelphia locations.
The accusations led to a national campaign to boycott Starbucks in an effort to pressure the company into making significant reforms.
Following the event, many investors worried that the massive backlash would result in a reckoning for Starbucks’ bottom line and cut into shareholder returns. Shares of Starbucks dropped roughly 5% after the incident.
However, it turned out that all the negative press had next to no impact on the company’s sales and profits.
In an April 2018 conference call with investors, Starbucks CEO Kevin Johnson stated that the backlash from the incident in Philadelphia resulted in no drop in sales.
“We are not seeing an impact on sales as a result of Philadelphia,” he said.
In fact, the company ended up reporting better-than-expected sales and a 2% growth overall.
As a result, investors who bailed on Starbucks following the firestorm of negative coverage missed out on real returns for shareholders.
In fact, Starbucks stock has run up 28% since April’s crisis, rewarding investors who weathered the storm with market-beating gains.
And Starbucks isn’t the only giant that came out from under a PR disaster to deliver stronger returns.
United Continental Holdings Inc. (NASDAQ: UAL), commonly known as United Airlines, has been plagued by one scandal after another over the last two years and continues to come out on top.
In April 2017, the company was universally criticized after a passenger was violently dragged off of one of the airline’s domestic flights to make room for company employees.
United’s stock took a beating in the short term, falling 25% in the months following the incident as investors abandoned the company’s stock.
However, despite the headlines, United has continued to post robust profits and has climbed up nearly 40% since 2017’s losses.
And that’s left investors who bailed licking their wounds.
Fortunately, you don’t have to make the same mistake with Boeing…
Why Boeing Stock Will Recover
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