Spirit AeroSystems 30d Short $17 - Floor Hasn't Hit Yet

SPR

Spirit AeroSystems will rebound, but not right now. All signs point to the price on a decline to below $17. They have halted production for Boeing jets indefinitely, cutting pay, and furloughing workers. Stimulus package will not save them in the short term, as they are too heavily reliant on their largest customer Boeing (80% of revenue). Once the floor has hit, I will look to value buy this stock.

I support what the Bears say: 'With its improved cash flow, Spirit will embark on value-destructive acquisitions. Customer concentration with Boeing (roughly 80% of revenue) leaves Spirit vulnerable to unfavorable negotiations and steep price step-down demands. Following 15 years of growth, the aerospace cycle will turn over, causing Boeing and Airbus to cancel deliveries and throttle back production, negatively affecting Spirit.” - Morningstar May 31, 2019

Be effective and happy trading!

- Darell

Ordre annulé:

Timing is everything. $25 Put Position was closed on APR 16 when price was at $19.06, one day before news broke that Boeing was reopening operations. Didn't make as mush as desired, but a gain is a gain.

Be effective, Happy Trading!

Commentaire:

Didn't hit the $17 level but this company is still aggressively dealing with the significant impacts of Boeing revenue gaps.