Taking a Seat to Growth

Most airline passengers don't give a second thought to the technology that goes into their seats. Other than grousing that the passenger in front of them is reclining into their lap, most passengers probably don't pay much attention to their chairs, meaning the fact that these chairs are technological wonders in their own right generally goes unnoticed.

From mobile phones to laptop hookups, watching TV to getting a back massage, the airplane seat of today is more than a place to sit. In fact, in some business jets and high-end planes, calling it a seat is almost an insult -- it's a pod that can serve as your bedroom (complete with bed!) as well as your sky-high office.

Leave it to BEAVer
BE Aerospace (Nasdaq: BEAV  ) is a top manufacturer of airplane cabin interiors and has ties to some leading plane manufacturers such as Boeing (NYSE: BA  ) and Airbus.

While the state of the airline industry, coupled with delays in production of Boeing's Dreamliner, has unnerved some investors -- shares of BE Aerospace are down about 25% from their highs reached at the beginning of the year -- only 15% of the company's backlog is tied to domestic carriers. Moreover, industry trends underscore BE Aerospace's abilities to overcome short-term problems that Boeing's delays might cause.

Finding good companies that have been beaten down unnecessarily by a jittery market just got easier with the new stock screener on Motley Fool CAPS. The 100,000 participating investors rate stocks on whether they will outperform or underperform the market. It's not a predictive service, but in its first year of operation, trailing returns of the stocks in the CAPS universe correlated precisely with their relative CAPS quality: Top-rated four- and five- star stocks outperformed low-rated one- and two-star stocks.

BE Aerospace showed up on a screen of companies in the aerospace and defense industry that have earned top marks from CAPS investors but whose share prices declined no more than 30% over the past three months. Here are some other companies that also made the list:

Company	CAPS Rating	3-Month Price Change	Est. EPS Growth Next Quarter	Est. Revenue Growth Next Quarter
BE Aerospace	*****	3.1%	84%	26%
Raytheon (NYSE:RTN)	*****	1.2%	16%	4%
Lockheed Martin (NYSE:LMT)	*****	(0.1%)	3%	2%
General Dynamics (NYSE:GD)	*****	8.9%	13%	10%
AeroVironment (NASDAQ:AVAV)	*****	3.8%	0%	17%
S&P 500	-	2.8%	-	-

Source: Motley Fool CAPS.

You can find the complete list of stocks the screen turned up by clicking here and running the screen I described. Of course, the list may have changed since I ran it, but you can use the screener to enter any parameters you want.

Taking flight
According to industry watcher Airline Monitor, worldwide air traffic is projected to grow at a compounded average rate of 5% per year between 2007 and 2022, increasing annual revenue passenger miles from about 2.8 trillion in 2007 to about 5.8 trillion by 2022. Moreover, wide-body aircraft deliveries are expected to grow at a nearly 20% annual growth rate through 2011.

With the global airline industry having expanded capacity by 6.2% in response to a 7.4% increase in global air traffic, BE Aerospace is well-positioned to capitalize on such trends. That's what CAPS investor xthecritic said in January would be a reason for BE's resurgence:

I like the suppliers to the airlines. Demand for air travel is a consistent grower. This company makes money on new planes and refurbishing old planes.

And how can you not want to hold beav? GO LONG BEAVE!

Taking a CAPS bow
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