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The market correction has taken most stocks lower, but the stocks in the defense sector have been hit harder than some, due to concerns over strained government budgets and defense spending cuts. Citi Investment Research analyst Jason Gursky seems to be finding value in the sector, and has set buy rating on a number of the stocks in this sector.

A recent Businessweek.com article states:

Spending by the Department of Defense dies hard, even after wars come to an end, said analyst Jason Gursky. In addition, international markets and other U.S. government agencies, such as NASA or the Federal Aviation Administration, remain viable sources for defense contractors. What's more, most investors have already have priced negative growth in to defense stocks with all of the talk of budget cutting. That has sent already sent defense sector stocks tumbling this year. Defense stocks are now trading at a 30 percent discount to the S&P 500...

Here are a few defense-related stocks that have now dropped to levels that may present a solid buying opportunity for long-term investors:

Northrop Grumman (NYSE:NOC) is a leader in aerospace, shipbuilding, unmanned aircraft, missile defense, cybersecurity and more. In terms of book value and price-to-earnings ratio, this stock appears to be one of the best values in the market. The dividend yield is also solid at nearly 4%.

Here are some key points for NOC:

  • Current share price: $54.82
  • The 52-week range is $49.20 to $72.50
  • Earnings estimates for 2011: $6.88 per share
  • Earnings estimates for 2012: $7.20 per share
  • P/E Ratio: about 7
  • Annual dividend: $2 per share which yields 3.7%
  • Book value: $43.70 per share

Lockheed Martin Corporation (NYSE:LMT) is a major aerospace and defense company. With some key programs like the Joint Strike Fighter being targeted for cuts, it is likely that LMT shares will drift lower until valuations are lower and more clarity arises on what effect the budget cuts will have on earnings.

Here are some key points for LMT:

  • Current share price: $76.03
  • The 52-week range is $66.36 to $82.43
  • Earnings estimates for 2011: $7.49 per share
  • Earnings estimates for 2012: $8.60 per share
  • P/E Ratio: about 10
  • Annual dividend: $3 per share which yields 4%
  • Book value: $9.87 per share

Boeing (NYSE:BA) is a major aerospace and defense company. This company is more diversified than some of the other names here, so it probably isn't as exposed to a major decline. However, Boeing has seen a number of production delays with some key products like the Dreamliner 787, so it makes sense to buy on dips only.

Here are some key points for BA:

  • Current share price: $65.38
  • The 52-week range is $59.48 to $80.65
  • Earnings estimates for 2011: $4.11 per share
  • Earnings estimates for 2012: $5.30 per share
  • P/E Ratio: about 16
  • Annual dividend: $1.68 per share which yields 2.6%
  • Book value: $5.30 per share

Force Protection (NASDAQ:FRPT) is a specialty manufacturer of armored vehicles, which include a mine-protected clearance vehicle, blast and ballistic-protected vehicles, and a high-speed all-terrain military vehicle, among others. With operations likely to wind down in Iraq and Afghanistan, the demand for these products is likely to fall. On the positive side, the company has a strong balance sheet.

Here are some key points for FRPT:

  • Current share price: $4.03
  • The-52 week range is $3.27 to $6
  • Earnings estimates for 2011: 36 cents per share
  • Earnings estimates for 2012: 46 cents per share
  • P/E Ratio: about 11
  • Annual dividend: None
  • Book value: $4.63 per share

Raytheon (NYSE:RTN) is a major aerospace and defense company. This company is known for its missile systems and unmanned aerial systems. This company is not as diversified as companies like Boeing, and this has caused the shares to trade near the 52-week low.

Here are some key points for RTN:

  • Current share price: $42.13
  • The-52 week range is $41.60 to $53.12
  • Earnings estimates for 2011: $4.88 per share
  • Earnings estimates for 2012: $5.56 per share
  • P/E Ratio: about 8
  • Annual dividend: $1.72 per share which yields 4.1%
  • Book value: $28.85 per share

General Dynamics (NYSE:GD) is a major defense contractor and makes combat vehicles, weapons systems, munitions, ships, and the world famous Gulfstream jets. This stock has already started to trend lower and does not appear to have found strong support, so it makes sense to buy only on dips.

Here are some key points for GD:

  • Current share price: $60.60
  • The 52-week range is $57.39 to $78.27
  • Earnings estimates for 2011: $7.19 per share
  • Earnings estimates for 2012: $7.69 per share
  • P/E Ratio: about 9
  • Annual dividend: $1.88 per share which yields 3.1%
  • Book value: $38.49 per share

Data sourced from Yahoo Finance.

Disclaimer: No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Source: Buying Opportunities In 6 Oversold Defense Stocks