What a Day!

I started the day feeling pretty good after coming off of margin and taking more profits from what has been an outstanding month. Even my stocks were fairing well against a down tape. Then the BA news hit.

TIE and PCP took nose dives (I had luckily sold all my PCP calls this morning before the dive) on the news that Boeing's 787 was now officially going to be six months behind schedule. After what I thought was the point where the initial selling had receded, I bought back into my PCP calls and added to my TIE calls.

Then after listening to the BA conference call, and finding a very credible presentation on the present situation for BA and their suppliers, I added more stock and calls for PCP and TIE and also added ATI calls. My reasoning was that BA specifically told analysts that they are not making any changes to their 787 supplier schedules or order amounts. They will proceed on the original time schedule and they described the challenges they are facing with respect to crucial parts for the first aircraft. I believe that the 787 delay, at this point, is not material to PCP or TIE's earnings in the future.

This doesn't seem like bad news for the suppliers. In fact, Boeing also came out and said that they will work with their suppliers to address any cash flow issues that may arise because of receivables on aircraft delivery clauses in their subcontracts. So, I am betting big that the stock will rebound on the news over the next week and continue to ramp towards earnings following my original thesis for TIE described in a previous post a few days ago..