Sep 16, 2011

Stock of the Month - ESL

Esterline Technologies Corp (NYSE: ESL)

My stock pick for September is ESL. This company is key manufacturer of sensors, systems, advanced materials for the aerospace industry. It is involved in everything from instrumentation panels, power systems, interface technologies. In a nutshell, they are one of the major parts manufacturer for commercial aircraft.

Boeing already has a huge backorder for its 787 Dreamliner and Airbus has also been rolling out big orders( 667 orders worth $60.9 billion+) for its revamped A320 called A320neo. There has been a surge in orders for new planes ( a lot more from Asia) for both Boeing and Airbus. Major US airlines are operating an aging fleet of aircraft nearing its life cycle, and have already starting putting big orders for newer aircraft that are better in terms of fuel efficiency, range and features.

Despite the recession slowing down demand for leisurely travel, I expect the entire global airline industry to buy more planes for the next decade and this company will stand to benefit the most from it.

After staying in the mid 80s earlier this year, this stock is currently near 60s.. Expect the stock to climb back up to 80s in the next 4-6 months as Boeing rolls out more of its 787 planes to customers like Korean Air & ANA.

97.5% of the company shares are held by institutions and they also sport a healthy record of beating analyst expectations quarter after quarter. Get 100 commission free trades by using this link and get ESL in the low 60s today.

Current Price as of Dec 2011: $58

Update: An example of how bullish this aerospace sector is and can be - United Technologies is buying Goodrich for $16.5B

Disclaimer: Investing in stocks carries a risk. Always consult your financial advisor before investing. This site may not be held liable for losses resulting from using any of the stock tips. This stock tip is for September 2011.
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sundhara rajan said...

Interesting . I would love dividend paying stock...

Ritika Kaur said...

The market has been so beaten down that you are better off betting on the price of the stock appreciating than trying to get tiny dividends.

You do benefit tax wise trying to get dividend paying stocks, but despite ESL not paying dividends, the stock price has potential to appreciate far more!

sundhara rajan said...

You stopped writing the blog?.