BE Aerospace (BEAV) Breakout Message Board

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Technology Stocks : BE Aerospace (BEAV) Breakout

BEAV 64.47

0.0%

Apr 21 4:00 PM EDT

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To: john smith who started this subject	9/20/2001 10:49:21 AM
From: Rob S.	Read Replies (1) of 210

B/E Aerospace has gotten slammed along with other companies selling products for commercial airlines. They turned in the forecasted earnings of 27c for the quarter but are unlikely to meet this quarter's forecast of around 35c. The immediate outlook looks bleak. CSFB downgraded today to a hold from a buy. The stock has come down about 80% and is now trading at the level of the 10 year low seen in 1991. Why this might be a buying opportunity; Management says that they have learned to weather this type of storm from previous experience. The business is more diversified both in range of products and geographic markets. Many areas of the world have learned to deal with terrorism so that air travel is expected to be much less effected than domestically. The big swing factor is the prospect for a huge retrofit of the existing fleets of commercial aircraft to incorporate newly developed security separation panels and doorways between the passenger compartments and the crew cabin. To my knowledge, BEAV is the only company to have this security partition developed and into four major airlines for evaluation. The units are getting flight qualified and face the possibility of modifications. It will include a video system (probably from Sony) so the crew can remotely monitor the passenger compartment. This video is also expected to be sent down to the air traffic control system for real-time monitoring. BEAV mentions this system in their recent conference call. Congressional committees on flight safety are meeting today in Washington to hear from representatives of the FAA, NTSB, Boeing, the airlines and others about what is needed to increase the security of the transport system. I doubt that specific legislation will develop this early in the process but expect crew compartment security partitions to be a prime topic of discussion. BEAV said that the potential is for $1 billion in added business. This is a conservative estimate imo. I think the total cost of the system and installation will be closer to $7 billion over a five to 7 year period. Deployments may well need to be phased over various types of aircraft with priority given to large planes and extended range aircraft that carry more lethal of that threat. There is no rush to buy BEAV because the aircraft sector can be expected to remain under pressure for some time to come. However, as soon as it looks likely that crew compartment security partitions will be adopted the stock should be purchased, ahead of actual contracts.

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