Buy, sell or hold: Japan's disaster makes more turmoil for the Boeing ...-money morning

Boeing spent the last ten years designing and building the next generation in commercial aircraft.

The 787 Dreamliner was used for the carriage of passengers further distances, in more comfort, while the less fuel. It contains a large number of new technologies in the design.

However, the challenge of integration of these technologies has caused Boeing deadline missed after the deadline. In fact, the current test aircraft during a test flight last autumn on fire and had to make an emergency landing.

The 9.0 earthquake in Japan the last event is for adverse consequences for Boeing Dreamliner schedule deliveries. Japan is a leading supplier of important sub modules for the plane. These components are built in Japan, and shipped to America for the final assembly.

It is an understatement to say that Japan will be busy rebuilding the damaged infrastructure for a while. The rolling blackouts will probably keep some of the highest technology offline, to guaranteed supplies are available.

Boeing subcontractors have been talking to the media about how they will be affected by the availability of petrol, among other things.

There is the potential for future parts shortages with a small number of vendors to their sub-tiers suppliers and/or the infrastructure-related effects, "said Doug Alder, a spokesman for Chicago-based Boeing, recently MarketWatch. "We're working through each of these risks and the development of plans to mitigate their consequences."

Given the continuing slippage in the 787 Dreamliner, there is no reason to believe that Boeing will be able to start hitting the deadlines? especially because the company delays in all its major new product lines experienced long before the tragic events in Japan. This has already led to a negative income growth cycle.

Boeing announced last month it had beat out European Aeronautic defense & space co. (EADS)-the company that builds Airbus aircraft – for a contract for the construction of a fleet of US Air Force refueling tankers. However, that surprise victory has already been fully priced in shares of the company.

Boeing stock has a 52-week range of $ 59. 48 – $ 76.00. It closed Friday at $ 69.07, allowing the company to a Price/Earnings (p/e) ratio of 15.5.

The company has a market capitalization of $ 50 billion with an enterprise value of 53 billion dollars once net liquid assets and liabilities are accounted for. The 63 billion dollars in revenue generated during the final twelve months.

To summarize of Boeing situation:

It is already three years behind schedule on its 787 Dreamliner.

The Dreamliner will probably see further delays as a result of the tragedy in Japan.

The company is also experiencing delays with his modernised 747 program.

It has negative revenue growth over the trailing 12-month timeframe.

News of the newly acquired airborne tanker contract is already priced into the stock.

Action to take: sell the Boeing Co. (NYSE: BA) (*).

Boeing will begin in the near future, faced with strong headwind. Shares of the company is a "sell" until a supply chain around the damage to the Japanese economy is rebuilt. The world does not have a lot of spare 787 and 777 capacities.

(**) Special note of Disclosure: Jack Barnes has no interest in the Boeing Co. (NYSE: BA).

[About the author: Columnist Jack Barnes began his career at Franklin Templeton in 1997. He started in Department of the company Fund-information-just as the Asian contagion of the Asian Tiger countries infected.

Barnes launched his own shop, RIA, in 2003, as the second Gulf war was to break out. In early 2006, after logging in a one-year return of nearly 83%, Forbes called Barnes the top stock picker in the competition "armchair investors who Beat the Pros". Are two hedge funds controlled double digit returns in 2008 generated.

Barnes withdrew on the beach in the summer of 2009, and continues to write from there. He is now the author of the popular blog, "confessions of a Macro Contrarian," and his "buy, sell or hold" column appears in Money Morning on Monday. In his column last week, Barnes BSH analyzed Freeport McMoRan copper gold & (Nasdaq: FCX).]