Why Does Billionaire Andreas Halvorsen Love The Boeing Company (BA)?

We track quarterly 13F filings from hundreds of hedge funds and other notable investors, using the included information to develop investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year). We can also use our database to compare the most recent filings to those from the previous quarter and identify any large changes in a fund’s position. We noticed that billionaire Andreas Halvorsen’s Viking Global initiated a position of over 12 million shares in The Boeing Company (NYSE:BA) in the first quarter of 2013, and that stock is now the fund’s largest holding. Read on for our analysis of the $76 billion market cap aerospace company or see the full list of Halvorsen’s stock picks.

After a brief period of safety concerns related to the new Dreamliner aircraft, which kept the stock essentially flat in the first two months of 2013, The Boeing Company (NYSE:BA) has risen to about $100 per share placing it up 30% year to date. The company’s numbers for Q1 show a small decrease in sales and pretax income versus a year earlier, with earnings rising entirely on a lower effective tax rate. Cash flow from operations came in at a little over $500 million- largely due to much higher inventories, which likely includes a buildup of Dreamliners in progress towards delivery- which was about even with the amount of cash the company used on capital expenditures.

Wall Street analysts are expecting $6.47 in earnings per share for this year, which makes for a current-year earnings multiple of 16. From that point The Boeing Company (NYSE:BA) is expected to continue improving on the bottom line, and as a result the forward P/E falls to 14. That’s a bit higher than pure value territory, and while business could boom from incoming plane deliveries it might be best to wait for more information about how the company’s performance is comparing to analyst forecasts. SAC Capital Advisors, managed by billionaire Steve Cohen, was another major shareholder in The Boeing Company (NYSE:BA) at the end of March reporting a position of 1.8 million shares (find Cohen’s favorite stocks).