This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Goldman's 6 Best Industrial Stocks for 2011

5. Lockheed Martin (LMT - Get Report) is among the largest aerospace and defense companies, with a market capitalization of $28 billion.

Its stock has rallied 11% in the past three months, but Goldman ranks it "sell" and expects 14% of downside to $70. Lockheed delivered solid quarterly results, with earnings per share of $2.11, exceeding Goldman's $2.05 forecast and the consensus estimate of $2.07. Still, declining segment profit and margin erosion are ongoing concerns for Goldman. The quarterly book-to-bill ratio came in strong at 1.6.

Goldman lifted its price target from $63 to $70 as the report lessened its degree of pessimism. On the basis of valuation, Lockheed is ostensibly attractive, costing 9.5-times forward earnings and 7.9-times cash flow, 42% and 25% industry discounts. But, in Goldman's view, value doesn't compensate investors for the company's growth deficiency. With "ongoing expectation for increased pressure on defense spending and contractor margins (potentially over an extended period of time), it is challenging to see any meaningful growth in the near to medium term."

Lockheed's operating margin declined from nearly 12% to 8.8% during the fourth quarter. Lockheed's 12-month earnings per share growth rate ranks in the 36th percentile for the aerospace and defense industry. Its gross margin ranks in the eighth percentile. The stock receives "buy" ratings from just 28% of analysts, indicating poor sentiment on Wall Street.

2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
CBI $49.67 -0.42%
CMI $139.32 0.04%
DOV $75.36 0.21%
ETN $71.56 0.21%
GS $196.25 -0.53%

Markets

DOW 17,841.98 -86.22 -0.48%
S&P 500 2,080.15 -9.31 -0.45%
NASDAQ 4,919.6440 -19.6830 -0.40%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs