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The Aerospace/Defense industry as a whole closed the day down 1.0% versus the S&P 500, which was down 1.6%. Laggards within the Aerospace/Defense industry included TAT Technologies ( TATT), down 1.6%, Astrotech ( ASTC), down 5.2%, Innovative Solutions and Support ( ISSC), down 5.0%, Sifco Industries ( SIF), down 2.3% and AeroVironment ( AVAV), down 1.7%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Northrop Grumman ( NOC) is one of the companies that pushed the Aerospace/Defense industry lower today. Northrop Grumman was down $2.54 (2.0%) to $121.47 on average volume. Throughout the day, 980,021 shares of Northrop Grumman exchanged hands as compared to its average daily volume of 1,001,100 shares. The stock ranged in price between $121.38-$125.22 after having opened the day at $124.00 as compared to the previous trading day's close of $124.01.

Northrop Grumman Corporation provides systems, products, and solutions in aerospace, electronics, information systems, and technical service areas to government and commercial customers worldwide. Northrop Grumman has a market cap of $25.8 billion and is part of the industrial goods sector. Shares are up 8.2% year-to-date as of the close of trading on Friday. Currently there are 5 analysts who rate Northrop Grumman a buy, no analysts rate it a sell, and 8 rate it a hold.

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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, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from TheStreet Ratings analysis on NOC go as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.79% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NOC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • NORTHROP GRUMMAN CORP has improved earnings per share by 15.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NORTHROP GRUMMAN CORP increased its bottom line by earning $8.34 versus $7.80 in the prior year. This year, the market expects an improvement in earnings ($9.40 versus $8.34).
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 74.39% to $572.00 million when compared to the same quarter last year. In addition, NORTHROP GRUMMAN CORP has also vastly surpassed the industry average cash flow growth rate of -19.63%.

You can view the full analysis from the report here: Northrop Grumman Ratings Report

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At the close, AeroVironment ( AVAV) was down $0.46 (1.7%) to $27.29 on average volume. Throughout the day, 234,392 shares of AeroVironment exchanged hands as compared to its average daily volume of 280,400 shares. The stock ranged in price between $27.20-$28.12 after having opened the day at $27.75 as compared to the previous trading day's close of $27.75.

AeroVironment, Inc. designs, develops, produces, supports, and operates unmanned aircraft systems (UAS), tactical missile systems, and efficient energy systems in the United States and internationally. It operates in two segments, Unmanned Aircraft Systems and Efficient Energy Systems. AeroVironment has a market cap of $658.7 million and is part of the industrial goods sector. Shares are down 4.8% year-to-date as of the close of trading on Friday. Currently there are 2 analysts who rate AeroVironment a buy, no analysts rate it a sell, and 5 rate it a hold.

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TheStreet Ratings rates AeroVironment as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from TheStreet Ratings analysis on AVAV go as follows:

  • The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 17.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AVAV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 7.84, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 50.00% and other important driving factors, this stock has surged by 28.64% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Aerospace & Defense industry and the overall market, AEROVIRONMENT INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • The gross profit margin for AEROVIRONMENT INC is currently lower than what is desirable, coming in at 31.32%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.95% is significantly below that of the industry average.

You can view the full analysis from the report here: AeroVironment Ratings Report

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Innovative Solutions and Support ( ISSC) was another company that pushed the Aerospace/Defense industry lower today. Innovative Solutions and Support was down $0.14 (5.0%) to $2.68 on heavy volume. Throughout the day, 171,608 shares of Innovative Solutions and Support exchanged hands as compared to its average daily volume of 54,400 shares. The stock ranged in price between $2.65-$2.85 after having opened the day at $2.74 as compared to the previous trading day's close of $2.82.

Innovative Solutions and Support, Inc., a systems integrator, designs, manufactures, sells, and services flight guidance and cockpit display systems. Innovative Solutions and Support has a market cap of $46.8 million and is part of the industrial goods sector. Shares are down 62.1% year-to-date as of the close of trading on Friday.

TheStreet Ratings rates Innovative Solutions and Support as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and poor profit margins.

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Highlights from TheStreet Ratings analysis on ISSC go as follows:

  • The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 20.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ISSC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.56, which clearly demonstrates the ability to cover short-term cash needs.
  • INNOVATIVE SOLTNS & SUPP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INNOVATIVE SOLTNS & SUPP INC reported lower earnings of $0.12 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($0.17 versus $0.12).
  • The gross profit margin for INNOVATIVE SOLTNS & SUPP INC is currently lower than what is desirable, coming in at 31.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 4.69% trails that of the industry average.
  • Net operating cash flow has significantly decreased to -$0.81 million or 221.52% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

You can view the full analysis from the report here: Innovative Solutions and Support Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.