Embraer (ERJ) five year holding period

are you eating your own cooking bs?

edit: ERJ sold some bonds this morning also

I took a nibble (in at 23.15), looked over financials and thought it was worth a shot. BS thesis seems sound and I am a big fan of buying stocks on silly dips. Dont think I am on board for the 5yr holding period but we’ll see what happens.

Yes, eating my own cooking. Obviously seen a tiny run up with everything else so I can’t rule out a beta related dip, but very confidant on the mid (2Y) to long (5Y) run return on this one. The longer the better with E2 and KC390 entry into service slated for 2018.

good stuff bs. love reading your analysis… rooting for yall.

did stud really put 100k into this??

yea i only invest in high quality cos. well in any case good luck to all.

What’s the lead time to bring these market?

Not sure what you’re asking.

I think we’re talking about designing planes but now i’m not sure

“the FCF is negative because they just completed simultaneous development on E2 and KC39”

Oh yeah, development for an aircraft like that (both of those are aircraft) generally spans between 3 and 5 years. Basically you invest for 5 years and then you produce for 10 to 20 years. Both of these should see entry into service in 2018 although the E2 is staggered across three sub models coming into market 2018, 2019 and 2020.

got it, thanks BS.

So cash flow pain for the first 3-5 years, maybe 6-12 production time? When do you see the product stabilizing? Im recalling Boeing had some issues stabilizing their 787 which took a few years but I think that’s pretty common right?

If that’s right, then if this product is really good they’ll have 3-5 year development period, 6-12 month production lead time then maybe 2 years to stabilize any issues. Do buyers in the backlog provide any capital relief up or is it all on Embraer?

So really it’s not a cash flow stable until the of the product’s mid-cycle? 5/6 to 8 years out from day 1?

I don’t think you have to go that far. For starters they’re already past development with deliveries starting next year. They also didn’t go from a clean sheet design on the E2 which cut down on a lot of costs and will cut down on a lot of production ramp up costs. It will also reduce any issues. The E2 and KC390 don’t have all the complexity of the 787 and are entering a market they already dominate through the current generation E Jet.

Update, good earnings, small pop. Cost control is exceding expectations, development of E2 running at or ahead of expectations and business jet line showing signs of strengthening demand. 2017 will continue to be a transition year with the new E2 deliveries beginning in 2018 and real profitability kicking into high gear in 2019. Market will look ahead on this, so I’d continue to sit tight and be patient on this name.

I bought it at 22.50 BS. Remember I’m coming after you if this thing flops

Lol, in four years just let me know where to mail the bill for 2/20

I added a bit to my position when it was down a bit a few weeks ago, quarters numbers looked pretty good market didnt seem to love it though i was impressed


Yeah, I was on that call. Good quarter. I’m surprised Stallion Dis hasn’t been after my ass with ERJ below $22.50. As far as I’m concerned nothing has fundamentally changed on the story and ERJ should prove more resilient if the Trump Trade unwinds over the next few years as it relies on neither fiscal stimulus or US tax cuts (Brazilian firm) for the valuation.

Took advantage of this recent post earnings dip to get in on this. Will add more over the next few weeks.

im down 2% you son of a b*!ch

Mahn, patience.