When a company’s stock price is increasing continuously, investors are usually divided in their opinions about its outlook. Some investors are doubtful about the growth potential of high growth stocks, but companies look out for different strategies in order to maintain their growth, and hence, investors’ confidence. Here are three companies, The Boeing Company (NYSE:BA), BlackRock, Inc. (NYSE:BLK), Metlife Inc (NYSE:MET) and that have appreciated about 25% year to date, and a detailed analysis of their strategies going forward.
Flying high with the Dreamliner
The Boeing Company (NYSE:BA)’s 787 Dreamliner resumed flying at the end of May after being suspended for about four months due to overheated batteries. Boeing is now on the path to ramp up production of the 787 Dreamliner. In May, it increased the 787 build rate from five aircrafts per month to seven aircrafts per month. Earlier, the company had expected to achieve this production rate by mid-year.
This will further help the company achieve its target of producing 10 aircraft per month by the end of this year. Currently, the The Boeing Company (NYSE:BA) Everett factory produces all seven aircraft per month, but the Boeing Charleston factory is scheduled to deliver three 787 Dreamliners per month by the end of 2013. With the additional production, the company should generate additional revenue of more than $4.5 billion per year from 2014.
Boeing launched the 787-10 Dreamliner at the Paris Air Show on June 18, 2013. It is the third aircraft of its flagship Dreamliner program, after the 787-8 and 787-9. This new aircraft features high bypass engines, a lightweight body, and a new wing shape. This will reduce operating costs by 20% compared to the Airbus A330-300. The first delivery of the 787-10 is targeted for 2018. The new aircraft is expected to be priced around $290 million, which is about $40 million more than the 787-9 aircraft. The Boeing Company (NYSE:BA) has already received an order of 102 aircrafts from five customers across Asia, Europe, and North America. The total revenue generation from these deals is around $30 billion.
Asia-Pacific and Europe will drive profitability
In May 2013, BlackRock, Inc. (NYSE:BLK) announced that it would acquire MGPA, a private-equity real estate investment advisory firm. The transaction is expected to be complete by the third-quarter of 2013. MGPA is focused on real estate investments in Asia-Pacific and Europe, with more than 60% of its assets invested in these regions. BlackRock’s real estate investment business is worth $13 billion in the U.S. and U.K.
This acquisition will help BlackRock, Inc. (NYSE:BLK) grab the real estate market in Europe and the Asia-Pacific. MGPA’s real estate investment business amounts to $12 billion, so its addition to BlackRock’s portfolio will almost double the amount of money the company has invested in the real estate business to $25 billion.
BlackRock, along with Euroclear Bank, will soon issue the first iShares Exchange Traded Fund. This ETF will be launched in July 2013 with an international security structure in Europe. Currently, all cross-exchange ETFs are issued and traded on one or more national stock exchanges, and are settled in the national central securities depository of the respective exchange where the trade is executed.
This process often causes inefficiencies when ETFs are traded across borders. The international security structure will centralize settlement for the ETF trades. This single European settlement location will ease cross-border ETF processing, improve trading liquidity, and lower transaction costs for investors. BlackRock, Inc. (NYSE:BLK) estimates that for 15 iShares ETFs, it will save around $261.7 million per year.