We recently compiled a list of the 10 Worst Performing Blue Chip Stocks in 2024.In this article, we are going to take a look at where Boeing Co (NYSE:BA) stands against the other worst performing blue chip stocks in 2024.
Strong Market Performance Amid Uncertainty
The third quarter ended with a bang, with all the major indices near record highs as investors shunned macroeconomic instability, soaring geopolitical tensions and U.S. election uncertainty. Strong gains in the quarter were fuelled by expectations of lower interest rates heading into year-end and growing expectations of a soft landing of the U.S. economy.
Artificial intelligence has been a big success story that has helped push the equity markets to record highs. Against the overall trend, the current bull market had a better second year, up 33% compared to the historical average of 13%, and a better first year, up 22% compared to the historical average of 44%, according to BofA. It’s also important to remember that even bull markets’ third years of growth can be rocky.
While the S&P 500 has gained over 60% since the 2022 lows, researchers at BofA note that there could be a significant pullback in the near future.
“Historical studies suggest that the third year of a typical bull market tends to be unremarkable as a mild bout of de-rating overshadows humdrum earnings growth,” BofA equity strategist Ritesh Samadhiya said in a note to clients.
Economic Concerns and Investment Opportunities
While voicing concern that the economy is running at a hotter-than-desired pace, Federal Reserve Governor Christopher Waller hinted that future interest rate cuts would be less drastic than the significant move in September. According to policymakers, recent employment, inflation, GDP, and income reports indicate that the economy might not slow down.
“While we do not want to overreact to this data or look through it, I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting,” Waller said in prepared remarks for a conference at Stanford University.
The sentiments come as investors remain cautious about the long-term outlook amid soaring geopolitical tensions and economic uncertainties. The growing uncertainties have been one of the catalysts behind some of the worst-performing blue chip stocks in 2024.
Nevertheless, some underperforming stocks may allow investors to purchase the long-term decline. However, many are just dealing with issues unique to their company, such as bloated balance sheets or broken business models.
It might be a while before the market bounces back. In the interim, investors should be aware of the market’s possible value stocks. Even if it is not popular or profitable in the short term, the long-term benefits of investing wisely and deviating from the crowd can be significant, according to the contrarian investing philosophy.
Investing during a market downturn may present chances for sizable returns in the long term. We examine the top 10 blue-chip losers to date and potential opportunities for investors to acquire them.
Our Methodology
To prepare this article, we began by listing all the holdings of the various blue chip ETFs like E.A. Bridgeway Blue Chip ETF, Vanguard Mega Cap ETF, and DOW 30. We then sourced the year-to-date share price returns for each company. Based on these returns, we ranked the companies in descending order.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Boeing Co (NYSE:BA) has carved a niche as one of the largest airplane manufacturers. However, its planes’ safety concerns have sent shockwaves in the industry, denting the company’s fortunes. Over the past year, the stock has shed more than 50% in market value and is down by about 37.81% for the year, making it one of the worst-performing blue chip stocks in 2024.
Boeing Co (NYSE:BA)’s 737 MAX was grounded for 18 months due to two deadly crashes, and an extensive investigation into the company’s manufacturing methods resulted in major delays in other aircraft programs. Failure to meet internal production targets has caused airlines to search for alternatives, depriving Boeing of the revenues it needs most.
The company’s woes have been exacerbated by the failure to agree with the International Association of Machinists and Aerospace Workers (IAM) Union District 751 over a new contract. The stalemate has only made it difficult for the company to ramp up production and meet delivery schedules.
Consequently, the first half of 2024 saw a sharp drop in deliveries of Boeing Co (NYSE:BA)’s narrow-body 737 as management was forced to slow deliveries due to manufacturing quality issues. By the end of the year, management aimed to return to a monthly rate of 38.
Without a doubt, Boeing faces difficulties, and it is uncertain if it will be able to finance the next generation of narrow-body aircraft within the next ten years. Nevertheless, a multi-year backlog guarantees that it can overcome its challenges.
By the end of Q2 2024, 42 out of the 912 hedge funds tracked by Insider Monkey had invested in Boeing Co (NYSE:BA). This notable interest reflects significant confidence in Boeing’s potential among institutional investors.
Overall BA ranks 2nd on our list of the worst performing blue chip stocks in 2024. While we acknowledge the potential of BA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BA, check out our report about the cheapest AI stock.
