| FINANCIAL COLUMN | Nov 14, 2011 |
A valuation rerating for Boeing?
The Dreamliner trade has long term money making potential. Boeingeasily beat its third quarter EPS of 1.10, surprising Wall Street with $1.46 in earnings per share. As significant, Boeingmanagement guided 2011 EPS higher, with $69 billion in sales.
The real ballast in Boeingis the $273 billion commercial aircraft backlog now that initial deliveries of the Dreamliner have begun. Meanwhile, Boeing’s military aircraft sales were slightly higher, despite the Pentagon’s planned exits from wars in Iraq and Afghanistan. The world’s leading aerospace firm is clearly in the sweet spot of global commercial aviation as the 787 Dreamliner will have a revolutionary impact on the economies and fuel price of the airline business worldwide.
Boeinghas disclosed it will earn single digit margins from its first 1100 Dreamliner deliveries, meaning its payback period on capex is not possible before 2016. Boeingexpects sales of 2000 Dreamliners in the next two decades. The 787 is the biggest new product launch in global aviation since the Jumbo jet and the Concorde a generation ago.
Boeingis one of the America’s leading defence contractors, a manufacturers of Hellfire missiles, F-15 Eagle warplanes, Apache helicopters and the Starlifter combat troop carriers. So Obama’s planned defence budget cut could hit military aircraft sales in 2012 even though the commercial aircraft order books have never been higher. Saudi Arabia’s $60 billion arms purchase programme, the biggest arms deal in the kingdom since Al Yamama, is hugely positive for Boeing, as is its success in winning the USAF aerial tanker contract. Earnings, cash flow, order book trends all suggest that Boeingshould be a core holding in any blue chip investment portfolio in 2012.
Boeingshares have bottomed in August in the mid-50’s and are a good buy in the 62-64 range for a 80 target. Boeingstill trades at a more modest valuation than EADS, the vendor of Airbus. Boeingis also the beneficiary of the expansion of air fleets and the creation of budget airlines in Russia, China, the Middle East and Southeast Asia. Boeingcan rise to 78-80 in the next six to eight months.
United Technologies (symbol UTX) has been on a roll in 2011. This is the one of the world’s most successful industrial conglomerates, with its Pratt and Whitney engines embedded in the DNA of the world’s civilian and military aircraft. United Technologies owns Sikorsky, whose brand name helicopters including the Black Hawk and Medevac. United is now in the midst of a global restructuring/cost cutting program that will increase operating margins and reduce the payroll by 14000. Its recent $18 billion deal to acquire Goodrich make it a major player in commercial aircraft components/electronics. United Technologies, like Boeing, is a major strategic partner in the development of the UAE aviation industry, with its aircraft/engine service joint venture with Mubadala.
The US economy is nowhere near double dip recession, with Q3 GDP at 2.5 per cent. With the Federal Reserve monetary ease at full throttle, a historic rollout of the world’s aviation infrastructure. I see no reason why the shares of both Boeingand United Technologies can experience a valuation rerating. These are both iconic, global high tech manufacturing businesses that command oligopolistic worldwide markets. Will 2012 enable us to once again revisit Boeing80 and United 90?
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| MATEIN KHALID
STRATEGIST, CAPITAL MARKETS & RESEARCH |
The opinions expressed by the writers are their own and not endorsed by Press Release Network.
| eMARKETING COLUMN | Nov 28, 2011 |
Context is King (Commiseration to Content)
In a socially enabled, internet powered world, consumers demand respect
The sheer volume of information available on the internet is overwhelming. Everywhere I look, there it is. Even when I'm not looking, it's there, waiting to be found.
Analyse the data thrown at you every single hour, every waking day:
Hundreds of emails, not to mention the junk mails
Information available through web sites, blogs, forums
Requests to join your social network from friends and strangers
Hundreds of Tweets
Searches on Google
By the end of the day, I don't want to know what I don't need to know.
This is where contextual marketing comes in.
According to a recent survey by Deloitte, 82% of people who use the web to research products, say reviews posted by others have influenced them to buy a different product than the one they had originally been thinking about purchasing. In my case, a friend’s recommendation has more value than a paid for advertisement extolling product virtues.
Here’s the bottom line. Your information isn't only on your website, it's across the web. Some of it you own, some of it you pay for and some of it is offered through your customers' satisfaction with your services.
Organisations need to provide contextually-relevant content to their customers and prospects alike, when and where they need it - on the device of their choosing, at the time of their convenience, personalized and well delivered. In a nutshell, customers will dictate the terms of engagement. Contextual ads that provide consumers with utility, entertainment and value are more likely to succeed.
In a socially enabled, search-powered world, consumers demand respect. Do not expect customers to navigate through your counter-intuitive ‘knowledge portal’ built by people who cannot identify a positive customer experience. Do not expect people in a hurry to contact support, via chat, or email and certainly not via telephone. Be smart enough to anticipate customer’s information needs and provide relevant, useful information when and where needed. You need to give people the information they need to learn about you and your products and as a result, a reason to come back to your website and buy from you.
You got to do it right – the first time, every time. Those of us paying the closest attention to consumers - using tech and data to anticipate their wants and needs - are going to figure it out first.
Send your feedback to sharad@cyber-gear.com
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| SHARAD AGARWAL
CEO, CYBER GEAR LLC |
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