We’re buying 45 shares of Boeing at roughly $200 each. Following Tuesday’s trade, Jim Cramer’s Charitable Trust will own 490 shares of Boeing, increasing its weighting to about 2.6% from 2.3%. Boeing shares have plunged 10% since the aircraft maker reported third-quarter earnings last Wednesday. It has been a frustrating decline, with the larger-than-expected charge on its 777X program standing out as one of the bigger disappointments. However, we still view this weakness in the stock as a long-term buying opportunity. Sure, the quarter was a setback. But the turnaround under Boeing CEO Kelly Ortberg is still progressing nicely, driven by better execution on its 737 program. With production moving from 38 airplanes per month to 42 — then eventually 47 and 52 under FAA guidance in the future — Boeing’s ability to make and deliver more planes will lead to strong free cash flow generation in the years ahead. BA YTD mountain Boeing YTD We also note that Boeing closed the sale of part of its Digital Aviation Solutions business to the Thoma Bravo private equity firm on Monday for $10.55 billion in cash. These cash proceeds will offset the pending acquisition of Spirit AeroSystems , which is expected to close by the end of the year. Boeing ended the third quarter with a net debt balance of about $30.4 billion — $23 billion in cash and $53.4 billion in debt — but analysts at Jefferies expect that to fall to about $25 billion at year end after factoring in both deals and a fourth quarter free cash flow usage of about $200 million, which includes an upcoming $700 million Justice Department settlement. Fixing up the balance sheet is an important part of our Boeing thesis, and we expect net debt to continue to fall over the next few years as free cash flow returns to positive territory. (Jim Cramer’s Charitable Trust is long BA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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