Boeing Co (BA) SEC Probe Sends Shares Lower – Is This a Bottom?


Shares of Boeing Co (NYSE:BA) are down considerably in late-morning trading today after it was revealed that the Securities and Exchange Commission is reportedly involved in a probe regarding the company’s profit projections. The probe is said to be concentrated on Boeing’s ‘program accounting’ in which the SEC is investigating the matter in which they’ve accounted for long-term profitability prospects for their 871 Dreamliner and 747 Jumbo aircraft.

This report comes as the company’s stock has already been undergoing a massive selloff. Shares of Boeing Co (NYSE:BA) are down close to 30% on the year already as the stock’s PE ratio has plunged to around 14. Today’s selloff has been on volume which is multiple times the average as investors seem to have lost confidence in the company. While nothing has been confirmed about the SEC probe, any menton of the SEC can scare investors, especially when the overall market is in such a violent downtrend.

Have shares reached a bottom yet? It’s too early to tell, but technical indicators point to this possibly being the case. We will carefully watch the stok trade over the next day or two to see if it can remain above the $100 PPS level. The stock is down 10.23% or $11.9 following the news, hitting $104.46 per share. About 9.86M shares traded hands or 53.11% up from the average. BA has declined 18.01% since July 8, 2015 and is downtrending. It has underperformed the S&P500 by 9.14%.

From a total of 5 analysts covering Boeing (NYSE:BA) stock, 2 rate it a “Buy”, 0 a “Sell”, and 3 a “Hold”. This means that 40% of the ratings are positive. The highest target price is $175 while the lowest target price is $145.0. The mean of all analyst targets is $159.25 which is 52.45% above today’s ($104.46) stock price. Boeing was the topic of 8 analyst reports since August 26, 2015 according to the firm StockzIntelligence Inc. Standpoint Research upgraded shares on January 14 to a “Buy” rating. RBC Capital Markets maintained BA stock in a recent report from October 22 with a “Sector Perform” rating.

The institutional sentiment increased to 1.19 in Q2 2015. It’s up 0.22, from 0.97 in 2015Q2. The ratio is positive, as 74 funds sold all their Boeing Co shares they owned while 439 reduced their positions. 94 funds bought stakes while 518 increased their total positions. Institutions now own 510.23 million shares which is 2.40% more than the previous share count of 498.26 million in 2015Q2.

Hengistbury Investment Partners Llp holds 22.69% of its total portfolio in Boeing Co, equating to 377,600 shares. Evercore Trust Company N.A. owns 43.30 million shares representing 21.87% of their total US portfolio. Moreover, Ruffer Llp has 12% of their total portfolio invested in the company, equating to 2.14 million shares. The Texas-based Ancient Art L.P. has a total of 9.78% of their portfolio invested in the stock. Levy Harkins & Co Inc, a New York-based fund reported 135,998 shares owned.

The Boeing Company, together with its subsidiaries, is an aerospace company. The company has a market cap of $68.50 billion. The Firm operates through five divisions: Commercial Airplanes, Boeing Military Aircraft , Network & Space Systems (N&SS), Global Services & Support (GS&S) and Boeing Capital (BCC). It has 14.04 P/E ratio. The Defense, Space & Security (BDS) business includes BMA, N&SS and GS&S.