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TWST: What has gone on so far this year in the aerospace sector?
Mr. Groh: Coming off of 2005, I think that most industry observers
expected the order flow to really dry up. So far, that hasn't happened.
However, most of the momentum has been captured by Boeing (BA) this
year. Year to date, Boeing orders are up about 6% on a gross basis (521
aircraft versus 508), and orders are worse for Airbus, down around 43%
(98 a/c versus 173). Airbus has announced some orders that haven't yet
been booked, so the numbers aren't as startling. But, all in all, I
think that order flow has been fairly impressive, considering the fact
that you are coming off a record year in 2005, with over 2,000
commercial aircraft ordered. TWST: What we are talking about here is primarily on the commercial
side, as opposed to military?
Mr. Groh: Exactly. Commercial is where I try to remain focused for a
couple of reasons. One, being based in the Pacific Northwest ' the
birthplace of the Boeing Company ' that's our heritage and two is that
military business, for the most part, is flattening. Our coverage list
and my investment focus is geared more toward what is going on with
commercial. But with any aerospace component suppliers, there is bound
to be some overlap between military and commercial parts.
Tickers included in this excerpt: BA, BEAV, BRKS, CAT, GE, GR, LDSH, LUV, PCP, RYCEY, UTX, ZODFF
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