Here’s a stock that can soar!

I believe that the next 10-year period will be a very strong one for the aerospace business as a whole.

With that in mind, lets take a look at one of our favorites, Boeing (NYSE: BA). This stock was placed in our model portfolio on September 30th of 1998 when the price was $35.23. Since then, the stock has rallied nicely, running all the way to the $70.90 area late last year and we see better things yet ahead.

Boeing has been in a correction mode since December 2000 and has been trading mostly in the $55 to $65 range. BA should soon be on the move again, and it can still be bought here, in our opinion.

Boeing operates in three separate areas ? Commercial Airlines Operations, Military Aircraft & Missiles and in the Space & Communications sector.

Recently Boeing has been working to shape the company to better meet the changing times. To that end, they have named CEOs at each of the three divisions: The Commercial Plane Division will be located in Seattle, Space and Communications in Seal Beach, California, and the Defense Division in St. Louis.

Furthermore, Boeing recently announced they are moving their executive headquarters to the Chicago area. These changes should make BA more efficient. There is a possibility that the company may spin-off one or more of these divisions into a separate, stand-alone entity.

The balance sheet at Boeing sparkles, and cash flow is strong. Lately BA has been quite aggressive in buying back their stock and you can look for that to continue.

There is some skepticism about Boeing’s future. You may have the impression that the company is locked in a life-and-death struggle with AirBus. The way the traditional print media reads it, BA is losing.

We believe the print media’s suggestions are all wet.

AirBus, a socialist welfare case funded by European governments, has never made a thin dime in their entire existence. Boeing is making lots of money. AirBus loses money on each and every plane they sell and will continue to do so for the foreseeable future. Boeing only makes planes for profit. AirBus takes whatever they can, even if it costs them money.

AirBus has staked it all on their big plane, the A380. BA thinks this is a mistake. The facts show that the bread-and-butter big money for BA has come from their mid-sized and small planes.

Another thing the media completely misses is that there is not one airport in the United States — or anywhere else for that matter — that could support this monster of a plane if it tried to land. It would split the concrete as quick as you can say “socialism stinks.” Airports would have to make big-dollar improvements to accept this monster. Will they spend billions to do that?

So, we think the impression the print media gives that Boeing is losing out to AirBus is bogus.

Of course, we know that many in the media are socialists and belong to the “Blame America First” crowd. These folks rub their hands together with glee waiting for our demise and any hint of that is warmly greeted in these quarters with the hope that we are on the slippery slope here in the USA. To them, we say: You’re going to have a long wait in the aerospace sector.

Clearly stated ? the USA rules this sector and you are wrong in your (forlorn) hope that AirBus will crush BA. Ain’t gonna happen. In fact, we see it just the other way.

Look at what happened when the EURO-dollar currency was introduced. The media went on and on about how the new currency would give the dollar a run for its money — what a laugh!

So far, in this horse race, the U.S. dollar looks as strong as Secretariat on a good day, while the EURO is just another cheap-nag in the currency world.

And how much longer are those European governments going to be willing to fund this welfare case called AirBus? Now, AirBus will quickly tell you they are privately owned. But the money and guarantees come from the Euro-governments. At some point, reality will meet their funding abilities. At that point, it is likely that the often shameless Europeans will come begging to Uncle Sam and BA to take this dog off of their hands.

In considering Yankee aviation ingenuity vs. European aviation ingenuity, well, you think about that, and tell us what you think.

I expect aviation growth to be especially strong in Asia in coming years. Asia is a place where BA is well known and well respected. You can expect BA to get large numbers of orders from this part of the world in the next 10 years.

I also expect the Defense business to be very strong in the next three to five years. Secretary of Defense Rumsfeld wants another $30 billion a year for defense — he should get most of it, even with the switch in the Senate that occurred yesterday.

If you look at Mr. Rumsfeld’s figures, much of this money is earmarked for the aerospace area; fighter planes, cargo planes, missiles, and even the new star on the block: unmanned aircraft. This is good news for the aerospace business, in general, and BA, in particular.

You need to fill your portfolio with first-class dominators that lead their sectors, and that is just what we think Boeing represents. You want your companies to be well managed and have strong cash flow and earnings. BA qualifies in all of these areas in our mind’s eye.

I do not view Boeing as a one-decision stock but, rather, a solid cyclical stock that has entered a very rewarding rally-phase.

Watch for Boeing to break through the old highs made in late 2000 in the $70.90 area. Once clear of that price on a close, BA will have scored a good technical breakout and should be on its way to a very nice upside rally.

I expect this stock to be an especially rewarding holding, over the next two- to three-year period, with the usual caveat that there are no guarantees implied or suggested here.