I also am interesting in Boeing, but I don't think the Gorilla game applies to such companies, but some of the concepts can still be applied.
Only real compeitior is Airbus, although I think Airbus may have a similar market share as Boeing. So here you have an oligopoly, and these kinds of markets tend to have supra-normal returns over the long haul. As you mention, no tornado, but this is still a growth industry, albeit a highly cyclical industry. If you were to compare it to a technology gorilla, you might compare to INTC given high capital expenditures and cyclicality.
Switching costs: Again, I'm not intimately familiar w/ the Airline industry, but I understand that switching costs are significant given specific types of maintenance and specialized tools required on these planes. Most Airlines, I believe, would like to fly an entire fleet of one "brand" of plane for this reason.
Proprietary Tech: Unsure of the analogy here. Don't know enough about patents, trade secrets, and specialized processes at Boeing, but some of this is likely there.
This said, from a numbers perspective, Boeing still seems expensive to me at current levels, despite the recent price drop. Even if they meet next year's estimate of around $1.50 EPS they're trading at a forward PE of around 26. That's expensive for a company having the problem Boeing is currently having IMO.
Shane |
