With Boeing’s (Boeing’s Stock Quote, Chart NYSE:BA) share price in a tailspin, the curious investor might be wondering if now’s the time to be buying the stock on the cheap. Not yet, says portfolio manager Chris Stuchberry, who claims that there could very well be further downside ahead.
Before the second tragic crash of one of its Max 8 planes, Boeing’s share price was on a tear, climbing 37 per cent over the first two months of the year. Then came March and the disastrous crash of an Ethiopian Airlines flight which killed all 157 people on board, coming only months after another Max 8 had crashed off the coast of Indonesia killing 189 people.
The news has caused the grounding of Max 8’s worldwide, but while Boeing is in the midst of identifying and addressing the software problem thought to be the cause of the crashes, the US Senate has since opened an investigation on the matter in connection with the Federal Aviation Administration, signalling that Boeing’s troubles might be far from over.
“Boeing is simply a case a uncertainty on top of uncertainty. They do make great planes and it would difficult to picture the amount of flights that people take without Boeing being there long-term. That said, we could have some long-term uncertainty with the name,” says Stuchberry of Wellington-Altus Private Wealth, to BNN Bloomberg on Tuesday.
Stuchberry says that it’s too early to tell whether the stock will continue to drop.
“When you buy these things, you do want to look at your entry above all and I don’t think you’re cleared any of that uncertainty. So if you did buy here, I think it’s very realistic that you could see another down dip on some kind of an aviation report or safety report or something along those lines, let alone a lawsuit,” he says.
“So, Boeing, I think you just put it on your watch list and look for something else on a risk-forward basis,” Stuchberry says.
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