Dr. Mike Heil truly has aviation in his genes as his father was a fighter pilot, flying 238 combat missions in the Burma Theater in WWII, the most of anyone. Now an aerospace consultant, Colonel Heil served for 30 years in the United States Air Force in high-ranking research positions. After graduating from the Air Force Academy, he was a Guggenheim Fellow for engineering at Columbia University, eventually earning a Ph.D. and a Master’s in aeronautical engineering. In 2016, he retired from his position as head of the Ohio Aerospace Institute.
Overall, Dr. Heil told InvestorPlace that he is bullish on the domestic aerospace industry. “America invented and built the aerospace industry. The United States is the world’s leading nation in aerospace, and the industry is poised for explosive growth.” To control this expanding market, he emphasizes, a return to a focus on engineering excellence is needed.
Heil points out the cautionary tale of what happened in the domestic auto industry. “The quality reputation of the U.S. and British auto industries suffered terribly in the 60s, 70s, and 80s, while the Japanese auto industry’s quality reputation flourished.” Eventually, Heil observed, “The U.S. auto industry re-learned the importance of process and quality control from the Japanese, and improved.” Here are three aviation stocks Dr. Heil thinks could soar if management follows the right flight plan.
Boeing (BA)
My favorite cousin was a fighter pilot and then flew for Delta Air Lines (NYSE:DAL) so I know pilots have their own jargon. I am not sure what the word for “train wreck” is but surely a picture of Boeing (NYSE: BA) would suffice. The share price for Boeing is down about 30% for the year but Heil sees the recent purchase of Spirit AeroSystems (NYSE:SPR) as an important step in its recovery.
About this, Heil detailed that, “Boeing’s decision to buy Spirit AeroSystems was the right call! Boeing will benefit by having direct control over its major structural supplier and having designing, engineering and manufacturing closely integrated and working to together to build better airplanes.”
Wall Street appears to be done digesting the bearish news as Boeing is up for the last quarter. Earnings per share are expected to soar. Buying by institutional investors is up, too.
GE Aerospace (GE)
Dr. Heil is bullish on GE Aerospace (NYSE: GE), describing it “…as a world leader in jet engines. It was a pioneer in developing high bypass turbofans, which power today’s jet airliners. GE’s bet on advanced composite fan blades and ceramic matrix composite materials helped them become the world’s largest and most successful jet engine producer for commercial aviation.”
It also does well in military sales, Heil declared. “GE’s engineering and technical leadership allows them to succeed in the military jet propulsion market, as well.” Military customers are more demanding so these products can easily satisfy commercial needs.
GE Aerospace has soared, up more than 60% for 2024. Wall Street remains bullish as institutional ownership is high and the short float is low. That shows that hedge funds, pension groups and other institutional investors expect the stock price to keep rising, as does Heil as he owns shares.
Joby Aviation (JOBY)
Heil is bullish on Joby Aviation (NYSE: JOBY) as its recent “…500-mile flight of a hydrogen-electric engine demonstrated that it is a leader in advanced air mobility. Longer ranges will open up lucrative markets for regional passenger and cargo transport.”
From his engineering background, Heil is especially pleased that Joby will be manufacturing from “Ohio as it is a pro-growth and pro-manufacturing state with access to an excellent workforce and stellar transportation network.” He furthered that, “The Air Force Center for Advanced Mobility Research, Development and Acquisition is nearby. As a result, Joby will be close to its Air Force customer, which is a tremendous competitive advantage!” Apparently, Joby learned from Boeing’s error in not having its facilities near major customers, Heil noted.
For those bullish like Heil, its a great time to buy as Joby is off nearly 40% for the last year. The stock price has started to recover, soaring on recent good news. But the short float is very high meaning plenty out there are betting the stock trades overvalued. The last analyst report was an “upgrade” from JPMorgan Chase in early May, though.
On the date of publication, Jonathan Yates did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, Mike Heil held a long position in GE. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.