3 Stocks Raising The Aerospace/Defense Industry Higher

All three major indices are trading down today with the Dow Jones Industrial Average ( ^DJI) trading down 120.72 points (-0.7%) at 17,420 as of Thursday, Aug. 6, 2015, 4:20 PM ET. The NYSE advances/declines ratio sits at 1,245 issues advancing vs. 1,837 declining with 137 unchanged.

The Aerospace/Defense industry as a whole closed the day up 0.2% versus the S&P 500, which was down 0.8%. Top gainers within the Aerospace/Defense industry included CPI Aerostructures ( CVU), up 3.3%, LMI Aerospace ( LMIA), up 1.7%, Ducommun ( DCO), up 6.2%, Orbital ATK ( OA), up 6.9% and Huntington Ingalls Industries ( HII), up 4.4%.

TheStreet Ratings Group would like to highlight 3 stocks pushing the industry higher today:

Ducommun ( DCO) is one of the companies that pushed the Aerospace/Defense industry higher today. Ducommun was up $1.52 (6.2%) to $26.12 on heavy volume. Throughout the day, 124,252 shares of Ducommun exchanged hands as compared to its average daily volume of 81,500 shares. The stock ranged in a price between $24.31-$27.00 after having opened the day at $24.98 as compared to the previous trading day's close of $24.60.

Ducommun Incorporated provides engineering and manufacturing products and services primarily to the aerospace, defense, industrial, natural resources, medical, and other industries. The company operates in two segments, Ducommun LaBarge Technologies (DLT) and Ducommun Aerostructures (DAS). Ducommun has a market cap of $256.4 million and is part of the services sector. Shares are down 2.7% year-to-date as of the close of trading on Wednesday. Currently there are 2 analysts who rate Ducommun a buy, no analysts rate it a sell, and 3 rate it a hold.

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TheStreet Ratings rates Ducommun as a hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and disappointing return on equity.

Highlights from TheStreet Ratings analysis on DCO go as follows:

  • Net operating cash flow has significantly increased by 135.87% to $3.49 million when compared to the same quarter last year. In addition, DUCOMMUN INC has also vastly surpassed the industry average cash flow growth rate of 22.53%.
  • DCO, with its decline in revenue, slightly underperformed the industry average of 4.3%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Aerospace & Defense industry and the overall market, DUCOMMUN 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 DUCOMMUN INC is rather low; currently it is at 19.47%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -1.14% trails that of the industry average.

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

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