How crazy would it be if Warren Buffett bought Boeing?
Berkshire Hathaway Inc.’s annual meeting on Saturday: Warren Buffett should buy Boeing Co.
The idea may sound outlandish on the surface because it rubs against Berkshire’s conservative nature. There’s also the sticking point that Buffett doesn’t do turnarounds and that he wants companies with strong leadership. Then again, Buffett likes to bet on American manufacturing, and he favors industries with moats. Check and check. Also, the upside for Boeing, if the planemaker can get its house in order, is huge.
Investors who are gathering in Omaha, Nebraska, on Saturday for Berkshire’s annual meeting will inevitably turn their discussions to how the 93-year-old business legend should deploy the company’s $168 billion pile of cash, which continues to increase. Buffett dabbles in buybacks, but don’t expect that to be a solution.
Buffett has noted that Berkshire is a victim of its own success because the company’s size makes it difficult to make deals and investments to move the needle on growth. For its size — market value of about $860 billion — deals have been modest. Several of the marquee acquisitions, such as Kraft Heinz and Precision Castparts, have underperformed.
One could argue that the pain around the purchase of Precision Castparts, a maker of specialized components for aircraft, would make Buffett shy away from ever investing again in the aerospace industry. Berkshire paid $32 billion for the company in 2016 and ended up writing down $11 billion
