History repeated itself yesterday. Big surprise.
Three months ago, I carped about the overabundance of articles pouring from the media's collective maw in response to Boeing's
If everyone else is saying one thing -- talking GAAP numbers, 787-start-up delays, and new plane orders -- then the only way to add value for Foolish investors is to look elsewhere.
Last time around, we accomplished that by looking past the income statement and examining Boeing's cash flows. After running the numbers, I concluded that Boeing looked significantly undervalued based on its free cash flow (in fact, it looks even cheaper now that Boeing has generated more in free cash flow than it thought it could). Today, we're going to look even farther afield and examine not just where Boeing is in valuation terms, but where it appears to be heading.
Boeing's bumper backlog
Over the past couple of weeks, I've been putting the entire defense industry through its paces, by reviewing trends in backlog at such militaristic worthies as United Technologies
After comparing Boeing's backlog position from last quarter against Wednesday's news, I'm pleased to report that things have changed very little in Q4. Here's how the numbers looked at year-end 2007, as compared with the closing figures for the two previous years:
|
2005 |
2006 |
2007 |
|
|---|---|---|---|
|
Contractual backlog |
$162.0 billion |
$216.6 billion |
$297.0 billion |
|
Unobligated backlog |
$40.2 billion |
$33.7 billion |
$30.2 billion |
|
Total backlog |
$202.2 billion |
$250.3 billion |
$327.2 billion |
|
YTD revenues |
$54.8 billion |
$61.5 billion |
$66.4 billion |
Once again, we see that Boeing grew its sales north of 20% over the past two years. And again we see backlog up above 60% over the same period, with orders secured by firm contracts growing even faster, and "unobligated" orders continuing to shrink. So once again, I must say: Boeing's da bomb.
Read up on recent Boeing news in:
