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Woodward (WWD) Hits 52-Week High on Investments, Backlog

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Shares of  Woodward, Inc. (WWD - Free Report) scaled a new 52-week high of $60.71 during yesterday’s trading session, before closing a tad lower at $59.68. With a market cap of around $3.65 billion, the company has seen its shares gain roughly 9.5% in the past one year.

Over the past 52 weeks, Woodward’s shares have ranged from a low of $39.68 on Oct 2, 2015 to a high of $60.71 on Jul 14, 2016. The average volume of shares traded over the last three months is approximately 0.3 million.

What’s Driving Woodward?

Woodward has been investing in new technologies in order to secure new businesses. It is also spending on new manufacturing units and automation equipment to ramp up efficiency. In doing so, the company spent $99 million as capital expenditure during the first six months of fiscal 2016.


Meanwhile, Woodward continues to focus on diversifying its revenue stream. Its strategic plan to become a systems integrator has boosted contract flow substantially, enabling the company to capture a larger market share in the wide-body commercial aircraft field. Notably, the launch of The Boeing Company’s (BA - Free Report) 737 Max and Airbus Group SE’s A320neo has resulted in increased demand for the company’s services & equipments.

In addition, Woodward is witnessing strong backlog in the commercial aerospace space due to rising demand for fuel-efficient aircraft and increasing passenger miles. The defense market also bodes well.

The company entered into a joint venture with GE Aviation, a unit of General Electric Company (GE - Free Report) for designing and developing fuel systems for the latter’s large commercial aircraft engine lines. The joint venture is strengthening the business alliance between the two companies and optimizing the fuel system performance by leveraging the combined fuel expertise.

Most importantly, global concerns related to greenhouse gas emissions are driving both popularity and demand of cleaner sources of energy. Since Woodward also focuses on developing technologies for natural gas extraction, processing and power generation, worldwide preference for alternate sources of energy is bolstering demand for Woodward’s services. This is a major positive for the company given the ongoing boom in natural gas production in the U.S., and its increasing use in electricity generation and transportation.

Zacks Rank

Woodward currently carries a Zacks Rank #3 (Hold).

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