Insider Purchases & Buybacks: NOC

I also expect the company to benefit from the huge and growing Indian market, which has until now been largely untapped by U.S. defense firms. Northrop has fielded interest from the Indian government to purchase the Advanced Hawkeye E-2D spy plane. The significance of this deal goes beyond the immediate economic value, as this deal provides Northrop a head start into a new arms market.

Analysts at UBS have raised their rating on the company from neutral to buy and upped their price target from $87 to $97. The analysts said in their note to clients that the company's stock was trading at a significant discount to its large-cap peers and that the previous times that the discount had widened to these levels, the stock had outperformed the market over the following six to 12 months.

On Stockpickr, you can take a look at some of the funds that have recently raised their stake in the company.

One of these was the LSV Value Equity Fund managed by Josef Lakonishok. This fund has a Morningstar rating of five stars and also owns Exxon Mobil (XOM - commentary - Cramer's Take) and JPMorgan (JP, - commentary - Cramer's Take).

Another fund upping its bet is the SEI U.S. Managed Volatility Fund. This fund aims for long-term comparable returns, as well as to protect investors from sharp market downturns. The fund also owns General Mills (GIS - commentary - Cramer's Take) and Kellogg (K - commentary - Cramer's Take).

With the company's board and various investment funds buying shares, I am optimistic about Northrop's future. In a slight aside, but also important, the company's 1.24 P/E/G ratio is lower than that of its peers, which is another attractive attribute. I believe Northrop is a good buy below $81.

---

At the time of publication, Raznick had no positions in the stocks mentioned, although positions may change at any time.

Jason Raznick is president of Easy Stock Alerts and has been involved with the capital markets for several years. He has worked for Merrill Lynch, Dynamis and Tricap Holdings, a joint venture with Fortress Investment Group. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Raznick appreciates your feedback; click here to send him an email.