Core Viewpoint - The transformation of General Electric into GE Aerospace has created a focused aerospace company, which is beneficial for investors as it has led to significant stock performance and valuation expansion [1][2][3]. Company Overview - GE Aerospace emerged as a pure-play aerospace company after the spinoffs of GE HealthCare Technologies and GE Vernova, focusing on jet engine and aerospace products manufacturing [2]. - The stock price of GE Aerospace has increased from around $80 per share before the final split-up to over $300 per share, reflecting an 80% year-to-date increase [4]. Market Performance - GE Aerospace has significantly outperformed the overall stock market, leading to massive valuation expansion as it is no longer subject to the "conglomerate discount" that affected its previous structure [5][6]. - The current forward price-to-earnings (P/E) ratio for GE Aerospace is approximately 42, which is a premium compared to other large aerospace companies like RTX, which has a forward P/E of around 26 [6]. Industry Context - The aerospace industry is experiencing strong growth prospects, driven by robust commercial and defense-related demand, which positively impacts GE Aerospace [9]. - Despite the strong performance, shares have faced macroeconomic challenges, such as tariff issues and recession fears, which could affect near-term performance [10][11]. Leadership and Future Outlook - The leadership of CEO Larry Culp is highlighted as a strength for GE Aerospace, with a background in successfully managing another conglomerate, Danaher [12]. - Analysts suggest that as long as GE Aerospace continues to generate strong earnings and cash flow growth, it could maintain a premium valuation compared to competitors [10].

All right, welcome back. The Josh Brown spotlight is so bright today that it is shining on three, not two, three stocks on his best stocks list. Tell us more.>> Yeah, and I'm going to try to keep this concise uh because I want to make sure we get to all three. Bottom line is this is a tailwind that's probably secular. Uh countries around the world are arming and rearming like we haven't seen in decades.The United States will spend $900 billion alone uh this year, which is an all-time high. Um and we've got ...

Core Insights - Boeing's stock is down approximately 1.25% following the announcement of a nearly $5 billion charge related to the 777X program, which has faced delays in aircraft delivery [1][4] - The company reported positive free cash flow for the first time on a quarterly basis in 2023, with a revenue increase of 30% [2] - Boeing's backlog in commercial airplanes has risen to nearly $100 billion compared to December 2024, indicating strong demand [2] - The company achieved record deliveries of 160 airplanes in the quarter, the highest since 2018, reflecting positive operational momentum [3] Financial Performance - Boeing's earnings report highlighted a significant $5 billion charge for the 777X program, which was higher than the anticipated $4 billion, raising concerns about its long-term cash generation capabilities [4] - Despite the non-cash nature of the charge, it may have multi-year implications for cash flow, contributing to negative market sentiment [4] - The FAA certification process has been slower than expected, which has compounded the delays in the 777X program [4][5] Market Position and Outlook - The 777X program was initially expected to enter service in 2020, but delays have shifted focus away from it, especially as the company worked on resolving issues with the 737 Max and 787 [5][6] - Boeing's stock has performed well this year, up 44%, but the current challenges with the 777X program have led to a neutral rating from analysts, indicating a balanced risk-reward scenario [6] - Analysts suggest focusing on suppliers to Boeing, such as Helmet (HWM) and RTX, which may benefit from increased production rates of the 737 Max and 787 without being affected by the 777X issues [7]

Group 1 - GE Aerospace stock reached a record high following a strong earnings report, with earnings jumping 44% and revenue growth accelerating for the second quarter [1] - The stock is currently above the buy point of $307.25 after a period of short consolidation, indicating positive market sentiment [1] - GE Aerospace has a composite rating of 99/99 and ranks 28 out of 197 in its industry group, reflecting its strong performance relative to peers [1] Group 2 - The overall stock market is experiencing new highs, with significant contributions from companies like GE Aerospace and Alphabet, which have also hit record highs [4] - The Dow Jones index has reached a record high, despite declines in gold and AI-related stocks, indicating a robust market environment [4] - Other companies in focus include L3 Harris, which has made a bullish move within its buy zone, and Lockheed Martin and RTX, which have raised their outlooks [4]

Core Insights - GE Aerospace has a dominant market position in the aerospace industry, supported by decades of recurring revenue and potential upside from revolutionary technology [1][2] - The company is considered an excellent option for long-term investors, providing a relatively safe investment with exciting growth prospects [2] Market Position - GE Aerospace operates in a highly competitive market with significant barriers to entry, requiring multibillion-dollar investments and expertise, with only three major players: GE Aerospace, RTX's Pratt & Whitney, and Rolls-Royce [3] - GE Aerospace is the leading player, manufacturing engines for key aircraft models, including the sole engine option for the Boeing 737 Max and the upcoming Boeing 777X [6] Revenue Generation - The commercial aerospace engines have a long operational life of about 40 years, generating recurring revenue primarily through maintenance, repair, and overhaul (MRO) services [7] - Approximately 40% of the CFM56 fleet has yet to undergo its first shop visit, indicating substantial future revenue potential [9] Growth Prospects - Management expects LEAP services revenue to match CFM56 services revenue by 2028, indicating a long-term growth trajectory [10] - The company is ramping up LEAP deliveries, with an upgraded estimate for delivery growth to 20% in 2025 [11] Innovative Technology - The long-term growth potential is bolstered by the Revolutionary Innovation for Sustainable Engines (RISE) program, focusing on open fan technology [13][14] - Open fan technology is expected to offer significant advantages in durability and efficiency, with a potential bypass ratio (BPR) exceeding 60, compared to current engines [16][17] Investment Outlook - If the anticipated BPR figures are achieved, RISE technology could solidify GE Aerospace's dominant market position and provide an additional 40 years of lucrative revenue [18]

Group 1 - The commercial aerospace industry is experiencing accelerated growth, as indicated by reports from leading companies like RTX and GE Aerospace, as well as smaller firms like Carpenter Technology, which saw a 28.5% stock increase following strong Q1 2026 earnings [1][3] - Carpenter Technology's CEO highlighted a strengthening demand environment, particularly in the aerospace supply chain, with September marking the highest order intake month in over a year [3] - The company is on track for continued growth, projecting operating income of $660 million to $700 million for 2026 and $765 million to $800 million for 2027, with a year-over-year operating income increase of 31% and a sequential bookings increase of 23% in Q1 [4] Group 2 - The aerospace supply chain is improving, leading to increased aircraft production, which is expected to significantly enhance Carpenter Technology's margins as revenue grows [6] - The company is recovering from the impacts of lockdowns on the aerospace industry and is well-positioned to outperform in the current market environment [3][4]

Core Viewpoint - Boeing is experiencing a turnaround under CEO Kelly Ortberg, with operational improvements and a significant backlog of $619 billion as of the end of Q2 [1] Group 1: Stock Performance and Investment Case - Boeing stock shows potential for near- to medium-term attractiveness if operational improvements are sustained [2] - The defense segment, known as Defense, Space & Security (BDS), has recently shown profitability after years of issues, which is a positive sign for the stock [2] - The majority of losses in BDS come from fixed-price development programs, which only make up 15% of the portfolio, indicating potential for margin improvement [4] Group 2: Management Changes and Operational Improvements - Management believes that BDS margins will improve as key milestones are achieved, with new BDS CEO Steve Parker focusing on better cost estimations [5][6] - The swift management changes under Ortberg are aimed at addressing past issues and improving operational efficiency [5] Group 3: Production and Delivery Rates - Boeing has over 4,800 unfilled orders for the 737 MAX, and the FAA has approved an increase in the production rate to 42 per month, enhancing delivery capabilities [8][9] - The increase in production rate is expected to positively impact delivery rates over time, contributing to the company's momentum [9][11] Group 4: Long-term Considerations - There are concerns about Boeing's financial feasibility to compete in the next generation of aircraft, with an estimated investment of $50 billion needed over a decade [12] - Boeing's current net debt stands at $30.3 billion, raising questions about cash generation cycles from the 737 MAX [12] - Competitive pressures are increasing, particularly with Airbus advancing its RISE program, which may put Boeing at a disadvantage if it does not adapt to new technologies [14][15]

Performance Overview - Major indices showed strong performance in Q3, with Russell Microcap rising 17.0% and Russell 2000 increasing 12.4%, while DJIA rose only 5.6% [2] - Cedar Creek's performance was notable, with a 9.9% increase in Q3 and a year-to-date increase of 26.5%, outperforming all major indices tracked [2][5] Historical Returns - Cedar Creek's average annual return over 19.75 years is 14.80%, with cumulative returns since inception at 1,418.1% [3][5] - A $100,000 investment in Cedar Creek at inception would have grown to $1,518,112 by September 30, 2025, compared to $367,933 in Russell MicroCap and $977,972 in NASDAQ [6] Fund Holdings Valuation - As of September 2025, fund holdings were trading at 7.7 times estimated earnings for the coming year, with a trailing earnings multiple of 12.4 times [7] - The fund's weighted price-to-book ratio was 1.2, with a dividend yield of 1.5% and an expected return on equity of 15.4% [7] Cash Levels and Repositioning - Cash levels increased from 3% to 17% during the quarter, primarily due to the sale of PharmChem at $3.75 per share [8] - The fund sold shares in Citizens Bancshares to reallocate to perceived better opportunities, increasing its position in Phi Group [8] Investment Focus - The fund is focusing on smaller community banks, finding several trading at 5-6 times forward earnings estimates [9] - The fund's exposure to expert market stocks increased to 41%, with five positions making up about 87% of this exposure [11][13] Performance Attribution - The increase in valuation of expert market positions contributed significantly to the fund's performance, with a 26% increase in aggregate during the quarter [18] - Control positions increased in value by just over 4%, while generally undervalued securities rose by 7% [18] Updates on Specific Holdings - PharmChem was sold, yielding a total gross return of approximately 40% over two years [20] - Solitron Devices saw an increase in bid price from $15.75 to $16.40 per share, with bookings significantly exceeding sales in recent quarters [21][22] Other Fund Holdings - ENDI Corp's share price rose from $15.65 to $17.55 during Q3, with assets under management for CrossingBridge Advisors growing over 30% in 2024 [25][26] - The fair value estimate for ENDI continues to rise, with a valuation of $21.85 to $26.50 per share based on cash earnings [28]

Group 1 - Lockheed Martin and RTX raised their earnings forecasts for the year, exceeding market expectations, while Northrop Grumman reported mixed results and lowered its sales guidance [1] - Defense stocks experienced pressure following comments from Treasury Secretary Scott Bessent regarding potential limitations on share buybacks for defense contractors [1] - L3 Harris secured a significant contract, indicating positive momentum within the defense sector as major companies prepare to report earnings [2] Group 2 - Boeing signed a $3 billion deal for Patriot missile technology, contributing to stock consolidation in the defense sector [4] - Rare earth stocks surged as China targets defense exports, reflecting increased demand and geopolitical tensions [4] - SpaceX emerged as a major beneficiary as the Space Force awarded $1 billion in launch contracts, highlighting the competitive landscape in defense contracting [4]

RTX raised its full-year profit outlook and reported third-quarter earnings that topped Wall Street expectations as profit rose across its commercial aerospace and military hardware businesses https://t.co/bjMVR4FONZ ...