Northrop Puckett
Contrarian, macro

Huntington-Ingalls' Stock Price Will Follow Margins Growth

Since being spun off from Northrop Grumman (NYSE:NOC) in 2011, Huntington-Ingalls (NYSE:HII), the destroyer and nuclear aircraft carrier and submarine builder, has consistently improved it efficiency. They have not met sales expectations, but the stock has remained strong since last Fall. We take a "big picture" view to analyze whether the stock has gotten ahead of itself, or whether the market is starting to accurately price in strong future earnings.

Financially speaking, and revenue stagnation aside, the company looks pretty good. Its PEG of .84 and its P/S of .41 lead its peers and indicate that there may be room for continued share price appreciation. Its forward P/E of 11 is also near the lowest of...

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