Should You Buy The Boeing Company (BA)?

The Boeing Company (NYSE:BA) is a better defense play than most of its peers because of its diversified revenue base. In other words, it's not as reliant on Uncle Sam as a General Dynamics or a Raytheon might be. So how are your richest peers playing it?


To many of your peers, hedge funds are viewed as bloated, old financial tools of a forgotten age. Although there are over 8,000 hedge funds in operation today, Insider Monkey aim at the upper echelon of this group, about 525 funds. It is assumed that this group oversees the majority of the smart money's total capital, and by watching their highest quality stock picks, we've figured out a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).


Just as necessary, optimistic insider trading sentiment is another way to look at the financial markets. There are many stimuli for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the useful potential of this strategy if shareholders know what to do (learn more here).


The Boeing Company (NYSE:BA)


Now that that's out of the way, it's important to examine the latest info for The Boeing Company (NYSE:BA).

What does the smart money think about The Boeing Company (NYSE:BA)?


In preparation for the third quarter, a total of 66 of the hedge funds we track were long in this stock, a change of 18% from the first quarter. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings significantly.


Out of the hedge funds we follow, Andreas Halvorsen's Viking Global had the most valuable position in The Boeing Company (NYSE:BA), worth close to $819.1 million, comprising 4.6% of its total 13F portfolio. Sitting at the No. 2 spot is Doug Silverman and Alexander Klabin of Senator Investment Group, with a $450.7 million call position; 7% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Natixis Global Asset Management's Harris Associates, Sean Cullinan's Point State Capital and Daniel S. Och's OZ Management.


As industrywide interest increased, specific money managers have jumped into The Boeing Company (NYSE:BA) headfirst. Viking Global, managed by Andreas Halvorsen, assembled the biggest position in The Boeing Company (NYSE:BA). Viking Global had 819.1 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin's Senator Investment Group also made a $450.7 million investment in the stock during the quarter. The following funds were also among the new BA investors: Sean Cullinan's Point State Capital, Daniel S. Och's OZ Management, and Phill Gross and Robert Atchinson's Adage Capital Management.

Insider trading activity in The Boeing Company (NYSE:BA)


Insider buying is at its handiest when the company we're looking at has experienced transactions within the past six months. Over the latest 180-day time frame, The Boeing Company (NYSE:BA) has seen 1 unique insiders buying, and 9 insider sales (see the details of insider trades here).


We'll also review the relationship between both of these indicators in other stocks similar to The Boeing Company (NYSE:BA). These stocks are TransDigm Group Incorporated (NYSE:TDG), Rockwell Collins, Inc. (NYSE:COL), General Dynamics Corporation (NYSE:GD), Lockheed Martin Corporation (NYSE:LMT), and United Technologies Corporation (NYSE:UTX). All of these stocks are in the aerospace/defense products & services industry and their market caps resemble BA's market cap.

Company Name
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling

TransDigm Group Incorporated (NYSE:TDG)
47
2
4

Rockwell Collins, Inc. (NYSE:COL)
18
0
13

General Dynamics Corporation (NYSE:GD)
37
0
13

Lockheed Martin Corporation (NYSE:LMT)
29
0
9

United Technologies Corporation (NYSE:UTX)
42
0
12

Using the results explained by our research, average investors must always track hedge fund and insider trading sentiment, and The Boeing Company (NYSE:BA) applies perfectly to this mantra.


Discover how hedge fund piggybacking can benefit you

Sign Up

Get the InvestingChannel
Free e-Letter Today

Learn More

Independent market opinion, analysis and ideas - delivered every business day

Premium market opinions, analysis, and ideas - delivered every business day

Editor's Picks