3 Reasons to Sell Boeing


The following video is part of our "Motley Fool Conversations" series, in which industrials editor/analyst Brendan Byrnes discusses topics around the investing world.

As part of our series "3 Reasons to Buy/Sell," Brendan discusses the bear case for Boeing. While we don't offer an explicit buy or sell recommendation, we do believe that investors should look at both sides of the coin before taking action on a stock. With that said, Boeing could struggle in the future given the state of the economy, since its commercial airline customers are highly sensitive to the macroeconomic events. If Europe drags the global economy down, it would certainly hurt Boeing's order book. Boeing also has considerable, though declining, exposure to the defense industry. Last year, 38% of its revenues came from the U.S. government alone, but potential investors need to consider the threat of a $500 billion slash to the defense budget over the next 10 years.

Boeing gets about half of its revenues from international markets, and considering the mess Europe is in, many investors may be nervous about investing in companies that are internationally focused. But they shouldn't be. Emerging markets are giving new life to established American companies with deep pockets. As these industry titans look abroad for more sales, they aren't starting with a blank slate -- they're bringing their operational excellence to new markets and thriving. To uncover three of our favorite picks to take advantage of high-growth emerging markets, we invite you to read a copy of our free report: "3 American Companies Set to Dominate the World." The report won't be available forever, so click here to get your copy today!

At the time thisarticle was published Brendan Byrnesowns shares of United Technologies. The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.