Alliant Techsystems (ATK) $89.37
Friday, October 10, 2008 9:08Steady and Visible Earnings
|
current price |
$89.37 |
Q yoy EPS |
10.40% |
mkt cap |
3.21B |
|
consensus PT |
$124.50 |
Q yoy Rev |
17.40% |
Avg Vol |
310,760 |
|
PE |
13.77 |
Op Margin |
10.23% |
EV |
39% |
|
FPE |
10.77 |
Cash |
20.38M |
Short % |
8.90% |
|
52 wk perf |
-18.50% |
Debt |
1,450.00M |
Idea rating |
8 |
YOY growth rate is quarterly.
Company Description
Alliant Techsystems supplies advanced weapons, munitions and space systems to the U.S. government, its allies and prime contractors. ATK also supplies ammunition to federal and local law-enforcement agencies and commercial markets. The company reports its operations in three business segments: Ammunition Systems, Launch Systems and Mission Systems. ATK is the largest supplier of small-arms ammunition to U.S. armed forces and police.
WHAT WE LIKE: Earnings Visibility
- We see the government currently printing money to save our economy from a Great Depression Part Deux. Surely the best client to have (the Federal Gov.) will obviously have the money to make sure the military (Part of our 1-2 global punch) is properly supplied as our global positioning is being tested and not guaranteed.
- ATK is the largest supplier of small-arms ammunition to U.S. armed forces and police. Sounds pretty stable in this environment.
- ATK offers a rare combination of strong organic growth and good earnings visibility. The defense-related nature of the business produces highly visible contract and order bookings with reliable buyers, and most contracts are announced publicly.
- ATK 1Q09 sales increased 17% overall versus 1Q08.
- Currently projects revenue growth of 15%-16%.
- Upside surprises are far more likely than an earnings miss
- ATK offers investors strong earnings growth potential with limited downside surprises, thanks to the defense-focused nature of its business
- Consensus price target increased $3 in the last week
- Short percentage decreased as well, although, could be a result of the short selling restrictions.
- The company continues to win contracts on a weekly basis.
- Best, based on estimates for earnings growth, only a reasonable PE multiple is needed in order to achieve a meaningful return which is important in this environment of inflation and slow to expand multiples.
OWNERSHIP:
JP Does Not Own, The firm does not own
