GE Aerospace Silences the Doubters -- Here's Why the Stock Is a Buy
GE Aerospace (NYSE: GE) covers nearly all the bases. Given its position as the leading airplane engine manufacturer and engine aftermarket service company, it stands to profit whether the market is trending toward original equipment manufacturing (OEM) as Boeing and produce planes, or whether the aftermarket is trending stronger.
Here's how and why aerospace watchers should favor this stock now.
The following nuance may appear a little complicated, but bear with me. It's quite simple if you start from the principle that new airplane engines tend to be sold at a loss. This is the so-called "negative engine margin" discussed in the aerospace industry. As such, when there are fewer expected engine deliveries, it reduces revenue expectations but still contribute positively to profit.
Source Fool.com
