This Is Why Investors Can’t Trust Boeing Stock

It’s hard to believe today, but there was a time when Boeing stock sold for more than $400 a share. That’s more than double its current value.

I remember those days, though, because Boeing was a recommendation of mine back in 2018. That’s when I officially began covering defense stocks. 

Boeing was a surefire pick back then. It was a company with a strong, even fabled track record stretching back to 1916.

And six years ago, it was living up to its name. By 2019, I was sitting on a 50% gain in just about a year’s time. That’s when tragedy struck.

Just over five years ago, 346 people died in two separate plane crashes five months apart. One was in Indonesia and the other Ethiopia. Both planes were Boeing 737 Max 8s.

The first crash seemed like a fluke, as any plane crash does these days. But when the second one went down, it was clear something was off at Boeing. 

Still, the company’s track record and reputation shielded it from a total collapse. Its stock continued to cruise around $350–$375 per share until the pandemic hit in 2020. 

You obviously can’t blame the company for that. The COVID pandemic was unlike anything we’ve ever experienced. Air travel was obviously a no-go and commercial jet companies like Boeing never stood a chance.

Nevertheless, the world moved on and the global economy (and the U.S. economy, in particular) recovered. Boeing stock rebounded as a result, and it looked as though the company was ready to resume its ascendance back to an elite level.

Of course, that’s not what happened. Instead, labor disputes and cost-cutting decisions Boeing made at the height of the pandemic came back to bite the company in a big way. 

Some 7,500 engineers and machinists were laid off in 2020. And it’s hard to believe that doesn’t in some way explain Boeing’s more recent mishaps.

In January, a fatal catastrophe was barely avoided when a door plug blew off a 737 Max 9 plane at 16,000 feet just as it took off from Portland, Oregon. A preliminary report from U.S. accident investigators said the door panel was missing four key bolts.

Worse, after the plane was grounded, Alaska Airlines conducted a review of its entire Boeing fleet and found that loose bolts were disturbingly abundant. And now, the Department of Justice is now investigating the incident to see if a crime was committed.

“Boeing is better than this,” said Alaska CEO Ben Minicucci. “Flight 1282 should never have happened.”

Well, he’s right that Flight 1282 never should have happened… but is Boeing really better than this?

Apparently not. Because just this week, a Houston-bound Boeing 737-800 plane made an emergency stop in Denver when an engine cover fell off and struck the plane’s wing flap.

Ladies and gentlemen, I flew to Florida and back to Baltimore last week. Both trips were on a Boeing 737. And yes, I felt compelled to stare out the window looking for flying nuts and loose panels. 

I had to tune out the children screaming behind me so I could listen for any out-of-place rattling sounds. This is how I will spend every flight on a Boeing from here to eternity — nervously scouring the fuselage for any imperfections. 

It’s not just me, either. Boeing has turned millions of air travelers into nervous wrecks. And the fact that its CEO has agreed to step down at the end of the year does nothing to assuage that. 

Dave Calhoun will be replaced, but not with a new coterie of engineers, mechanics, and quality control personnel. He’ll be replaced with another executive whose only real concern is the value of his stock options.

Along with valuable business and the workers that make it all happen, another thing that disappeared in 2020 was Boeing’s dividend. There’s no reason to believe that will return any time soon either.

Boeing is toast. It simply can’t be trusted — not by passengers and certainly not by investors. 

So if you want to invest in flight technology, invest in drones. Specifically, drones made by companies like this one.

Fight on,

Jason Simpkins

Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more…

In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor’s page.

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