The Aerospace Story Plays Out

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June 3, 2006 | SIN Picks | | Author Asif

The focus of last month’s SINLetter was increased activity in the commercial aerospace sector and we identified Eaton Corp (ETN) as one of the beneficiaries of this trend. Eaton supplies aircraft parts to both Boeing and Airbus and is likely to benefit from the large number of aircraft orders that Boeing has received in the recent past.

Two events that occurred last week, confirm this long-term trend. Heico Corp (HEI), a company that makes aircraft parts like Eaton, reported very strong quarterly results with a 38% jump in quarterly revenue. The second event was the announcement by Boeing (BA) that it received $5.8 billion worth of orders for commercial aircraft last week. You can view the current list of Boeing orders here. With the recent correction in commodity prices, another way to benefit from this trend could be through investments in aluminum producers like Alcoa (AA) or Alcan (AL).

Voluntary Disclosure: I do not own any positions in any of the stocks mentioned in this blog entry.

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