Declines From Textron Inc (TXT) Drive Down Aerospace/Defense Industry

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.

Textron ( TXT) pushed the Aerospace/Defense industry lower today making it today's featured Aerospace/Defense laggard. The industry as a whole closed the day up 0.1%. By the end of trading, Textron fell 29 cents (-1%) to $28.68 on average volume. Throughout the day, 2.2 million shares of Textron exchanged hands as compared to its average daily volume of 2.5 million shares. The stock ranged in price between $28.59-$29.08 after having opened the day at $29.08 as compared to the previous trading day's close of $28.97. Other companies within the Aerospace/Defense industry that declined today were: Astrotech Corporation ( ASTC), down 2.5%, GenCorp ( GY), down 2.4%, and AAR ( AIR), down 1.7%.
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Textron Inc. operates in the aircraft, defense, industrial, and finance businesses worldwide. It operates in five segments: Cessna, Bell, Textron Systems, Industrial, and Finance. Textron has a market cap of $7.78 billion and is part of the industrial goods sector. The company has a P/E ratio of 14.5, below the S&P 500 P/E ratio of 17.7. Shares are up 16.9% year to date as of the close of trading on Monday. Currently there are seven analysts that rate Textron a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates Textron as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

On the positive front, Embraer S.A ( ERJ), up 2.3%, Aerovironment Incorporated ( AVAV), up 1.8%, and CAE ( CAE), up 1.8%, were all gainers within the aerospace/defense industry with Spirit AeroSystems Holdings ( SPR) being today's featured aerospace/defense industry leader.

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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