BA stock loss question

[dragonwalker]

I bought about $10K of Boeing (BA) in March 2019 at $381.42 a share. It's currently trading at $145.32 so a loss of 62% or about $6K.

It seemed moving past the MAX disasters it's still in a quagmire of issues with it's stock price only briefly hitting $252 since I acquired it. I'm not sure when it will restart dividends or when it will or if it ever will return back to it's pre MAX days. Do you guys think this might be a good stock to sell at a loss to get my 3K write off? I have no other stock trades so this should write off against my earned income which this year I will have some unexpected income that I have not had tax withheld for this year. I'm thinking selling about half to get to the 3K limit and holding the other half and seeing where it goes since it's near the bottom anyway.

[reeshau]

Stock loss harvesting is a matter of selling for the short term, waiting the necessary time, and then buying it again.

Is that what you mean to do?  It sounds like you are just looking to sell, and move on.

Boeing no doubt blew a strategic product positioning advantage over Airbus, which had to shoot its white elephant, the A380.  But comical as they both are, they are still a duopoly.  And air travel demand has come back very strong with the lifting of Covid restrictions, which anyone who flew this summer could tell you.

Boeing's problem is not lack of demand, which is one of the few things they don't control.  If your time horizon is long enough, it seems like a good turnaround candidate.

[dragonwalker]

Interesting, thanks for the information. That definitely makes me consider keeping it. 

[reeshau]

To put some numbers on this, from a long-term (5 years) fundamentals-based perspective:

Morningstar currently rates Boeing 5 stars, with a fair value of $238.  This is based on its 5-year potential.

Value Line, which looks from 3-5 years out, shows a potential appreciation from $205 to $305.

I'm sure these would be impacted somewhat if Boeing does not make the deadline to certify the cockpit documentation for the -7 and -10 MAX.  If they miss it, Boeing will have to redesign the cockpit controls, delaying orders and introducing variety in their 737 offerings, which may impact customer decisions.

[Weathering]

BA bonds are trading at 7% yield to maturity. Something to consider for a tax advantaged account.

[PDXTabs]

I, personally, would realize $3k of loss to offset $3k of income on your taxes this year.

[habanero]

If you think BA at current price is a better investment that your alternatives (of which there are a ton)  keep it, if not sell it and invest in something else. The fact that you are underwater on it is irrelevant aside from any tax effects from realizing the loss. Either you think it's a good investment at the current price or not.

Out of 26 analysts who have their recommendation on Bloomberg 21 has a buy, 3 a hold and 2 a sell recommendation. The 21 might be wrong, so may the 3 or the 2. The average 12 month price forecast is 207 per share.

A majority of analysts also had a buy recommendation in march 2021 when it was trading at ~250 so being a professional paid analyst does not mean your crystal ball is working.

Hope is not a good investment strategy.

Being 60% down isn't "near the bottom" btw. It's still a 100% down to zero which is the actual bottom. Not that I think BA will end here, but there is no law stating that a stock that has tanked must eventually recover in the foreseable future.

[MustacheAndaHalf]

Do you guys think this might be a good stock to sell at a loss to get my 3K write off? I have no other stock trades so this should write off against my earned income ...

Did you receive a 1099-DIV from your broker last year?  Generally dividends are taxed at a lower rate, and I believe losses subtract from those first.

[dragonwalker]

Interesting, I looked back at a previous year I had only a loss and no capital gains from sale of stock but I had dividends and the way the loss appears on the first page of the 1040 suggests it's written off of ordinary income regardless of if I had a qualified dividend.