CNBC’s Jim Cramer advised buying the slump in Boeing after shares traded lower for two consecutive sessions.
“Despite some short-term turbulence, Boeing is perfectly positioned as the grand reopening is in full swing,” said the host of “Mad Money” on Monday.
Dozens of 737 Max jets made by Boeing were temporarily grounded Friday to resolve an issue with the aircraft’s power grid. Boeing shares have fallen 2% since the announcement and closed below $ 250 a share on Monday.
However, Cramer said circumstances do not warrant dumping the stock as Boeing is at a tipping point.
“Boeing has too much to do for its shareholders to be scared by a bad headline,” he said. “I don’t see the decline in some negative sell-side research on corporate governance today as a problem either.”
Boeing’s 737 Max was put back into service late last year after being shut down worldwide after two fatal accidents that killed hundreds of people.
The demand for air travel is increasing as consumers become less concerned about contracting coronavirus. Meanwhile, airlines are ordering more planes that can be financed at low interest rates, Cramer said. For example, Southwest Airlines announced the purchase of 100 units of the smallest Max model last month.
“Aside from this minor issue, the 737 Max is really back. Look, this used to be Boeing’s most popular aircraft and it was recertified as airlines prepared to place orders again in anticipation of the big reopening,” he said .
“That’s why we own this for the charitable foundation, and so far our thesis is working as expected.”
Despite the sell-off over the past four weeks, Boeing shares are up more than 16% this year. The stock outperforms the S&P 500, which is up 10% since the start of the year.
Disclosure: Cramer’s charitable foundation owns shares in Boeing.
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