Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
Northrop Grumman (
NOC) pushed the Aerospace/Defense industry higher today making it today's featured aerospace/defense winner. The industry as a whole closed the day up 0.4%. By the end of trading, Northrop Grumman rose 71 cents (1%) to $68.79 on average volume. Throughout the day, two million shares of Northrop Grumman exchanged hands as compared to its average daily volume of 1.6 million shares. The stock ranged in a price between $68.19-$68.93 after having opened the day at $68.30 as compared to the previous trading day's close of $68.08. Other companies within the Aerospace/Defense industry that increased today were:
Hexcel Corporation (
HXL), up 3.2%,
TransDigm Group (
TDG), up 2.5%,
B/E Aerospace (
BEAV), up 2.4%, and
TAT Technologies (
TATT), up 2.1%.
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Northrop Grumman Corporation provides products, services, and solutions in aerospace, electronics, information systems, and technical services worldwide. Northrop Grumman has a market cap of $16.78 billion and is part of the
industrial goods sector. The company has a P/E ratio of 8.7, equal to the average aerospace/defense industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 16% year to date as of the close of trading on Wednesday. Currently there are two analysts that rate Northrop Grumman a buy, three analysts rate it a sell, and 11 rate it a hold.
TheStreet Ratings rates Northrop Grumman as a
buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the aerospace/defense industry could consider
iShares DJ US Aerospace & Def Idx (
ITA) while those bearish on the aerospace/defense industry could consider
ProShares Short Dow 30 (
DOG).
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