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Bull of the Day: Huntington Ingalls Industries (HII)
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While the Trump Trade has faced a rough patch as of late, investors still appear pretty bullish on the prospects for the defense industry. It doesn’t hurt that this area is a favorite spot for Republicans, and that Trump has already come out with plans to spend an additional $54 billion on the defense budget this year alone.
And though there are numerous companies that could benefit from a burst (and elevated amount) of spending in the defense world, it might be best to focus in on a company like Huntington Ingalls Industries ((HII - Free Report) ) for long-term profit potential in this type of environment.
HII in Focus
Huntington Ingalls was formed as a spin-off of Northrop Grumman ((NOC - Free Report) ) back in 2011, and is focused on the building of ships primarily for the U.S. Navy. Its most famous divisions focus on the building of nuclear submarines (it is one of two builders of U.S. Navy nuclear subs), and nuclear-powered aircraft carriers. In fact, Huntington Ingalls is actually the sole designer and builder of these aircraft carriers for the U.S. Navy.
This could be a great spot to be in if Donald Trump, or the U.S. Navy, get their expansion plans fulfilled. Trump recently called for a 350 vessel Navy, and the U.S. Navy has recently called for a similar (355) amount of ships for its total fleet as well (up from today’s 272). The Navy cited rising threats from emerging powers—and resurgent ones too—as the primary reason for the needed buildup, with the potential for $16.3 billion in new ship construction a year according to the Congressional Research Service, via this Bloomberg article .
As such, HII looks to be a prime beneficiary of this plan, assuming it is enacted of course. The Navy is looking for an additional aircraft carrier, and more than a dozen subs too, giving the people at Huntington Ingalls plenty to fill their product pipeline.
Estimates and Fundamentals
No wonder analysts have been slowly raising estimates in this environment for the long-term picture in HII stock. We haven’t seen any estimate cuts in the past two months for either the full year or next year consensus estimates, suggesting the long-term future is bright. And after all, even if the plans do take a while to come to pass, it is at least a pretty safe bet now that we won’t see cuts to defense spending, which is definitely allowing investors to sleep soundly in this name and others in the industry too.
Huntington Ingalls Industries, Inc. Price and Consensus
The company is also impressive from a fundamental look as well, as none of its component grades—value, growth, or momentum—are lower than ‘B’ right now. This is thanks in part to incredible 52-week momentum on the price front, but also its industry-crushing projected EPS growth figures, as well as its PEG ratio that is far below the industry too.
With these kinds of figures, it shouldn’t be a surprise that HII has earned itself an ‘A’ Grade for its VGM Score, while it has also received a Zacks Rank #1 (Strong Buy) as well.
Bottom Line
Defense spending seems likely to increase over the next few years, and the Navy could be one of the biggest spending spots for these extra dollars. Given these trends, why not take a closer look at one of the most important companies building the ships?
Huntington Ingalls definitely fits that bill with its focus on nuclear-powered subs and aircraft carriers, and it is positioning itself to be a long-term beneficiary too. Add in its solid near term fundamentals—including impressive growth and earnings estimates—and this stock is definitely worth a closer look for those seeking a play for the in-focus defense industry right now.
Now see our private trades
Today's Bull of the Day is a promising buy that we're sharing with the public. Now would you like to look behind the curtain and view all our private portfolios? Starting today, for the next month, you can follow them in real time from value to momentum . . . from stocks under $10 to ETF and option plays . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even be privy to portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks moves >>.
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Bull of the Day: Huntington Ingalls Industries (HII)
While the Trump Trade has faced a rough patch as of late, investors still appear pretty bullish on the prospects for the defense industry. It doesn’t hurt that this area is a favorite spot for Republicans, and that Trump has already come out with plans to spend an additional $54 billion on the defense budget this year alone.
And though there are numerous companies that could benefit from a burst (and elevated amount) of spending in the defense world, it might be best to focus in on a company like Huntington Ingalls Industries ((HII - Free Report) ) for long-term profit potential in this type of environment.
HII in Focus
Huntington Ingalls was formed as a spin-off of Northrop Grumman ((NOC - Free Report) ) back in 2011, and is focused on the building of ships primarily for the U.S. Navy. Its most famous divisions focus on the building of nuclear submarines (it is one of two builders of U.S. Navy nuclear subs), and nuclear-powered aircraft carriers. In fact, Huntington Ingalls is actually the sole designer and builder of these aircraft carriers for the U.S. Navy.
This could be a great spot to be in if Donald Trump, or the U.S. Navy, get their expansion plans fulfilled. Trump recently called for a 350 vessel Navy, and the U.S. Navy has recently called for a similar (355) amount of ships for its total fleet as well (up from today’s 272). The Navy cited rising threats from emerging powers—and resurgent ones too—as the primary reason for the needed buildup, with the potential for $16.3 billion in new ship construction a year according to the Congressional Research Service, via this Bloomberg article .
As such, HII looks to be a prime beneficiary of this plan, assuming it is enacted of course. The Navy is looking for an additional aircraft carrier, and more than a dozen subs too, giving the people at Huntington Ingalls plenty to fill their product pipeline.
Estimates and Fundamentals
No wonder analysts have been slowly raising estimates in this environment for the long-term picture in HII stock. We haven’t seen any estimate cuts in the past two months for either the full year or next year consensus estimates, suggesting the long-term future is bright. And after all, even if the plans do take a while to come to pass, it is at least a pretty safe bet now that we won’t see cuts to defense spending, which is definitely allowing investors to sleep soundly in this name and others in the industry too.
Huntington Ingalls Industries, Inc. Price and Consensus
Huntington Ingalls Industries, Inc. Price and Consensus | Huntington Ingalls Industries, Inc. Quote
The company is also impressive from a fundamental look as well, as none of its component grades—value, growth, or momentum—are lower than ‘B’ right now. This is thanks in part to incredible 52-week momentum on the price front, but also its industry-crushing projected EPS growth figures, as well as its PEG ratio that is far below the industry too.
With these kinds of figures, it shouldn’t be a surprise that HII has earned itself an ‘A’ Grade for its VGM Score, while it has also received a Zacks Rank #1 (Strong Buy) as well.
Bottom Line
Defense spending seems likely to increase over the next few years, and the Navy could be one of the biggest spending spots for these extra dollars. Given these trends, why not take a closer look at one of the most important companies building the ships?
Huntington Ingalls definitely fits that bill with its focus on nuclear-powered subs and aircraft carriers, and it is positioning itself to be a long-term beneficiary too. Add in its solid near term fundamentals—including impressive growth and earnings estimates—and this stock is definitely worth a closer look for those seeking a play for the in-focus defense industry right now.
Now see our private trades
Today's Bull of the Day is a promising buy that we're sharing with the public. Now would you like to look behind the curtain and view all our private portfolios? Starting today, for the next month, you can follow them in real time from value to momentum . . . from stocks under $10 to ETF and option plays . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even be privy to portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks moves >>.