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Aerospace/Defense Firms Dominate Short-Term Forecast/Quality Screen

|Includes:Actua Corporation (ACTA), BA, CSR, GD, LLL, LMT, MNTA, MTG, NOC, OA, RTN, TGI, TNE
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December 8, 2010
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Majority Report

Aerospace/Defense Firms Dominate Short-Term Forecast/Quality Screen

  A screen for short-term forecast return leaders today provided some interesting results.  We queried our database looking for tickers ranked in the top 2% One-Month Forecast Return category with share prices in excess of $3.00 and average volume of 100k shares/day.  When we sorted the results by composite score--a broader quality measure which takes into account momentum, valuation, p/e ratio, and market cap as well as the short-term forecast return--we found our results dominated by aerospace/defense firms.

  One wonders how these firms can be doing so well given the possibility of future defense cuts, but analysts note that many have been preparing for that eventuality by cutting work forces and paring back on expenses.  Like so many other big firms, the austerity measures are now paying dividends to the bottom line.  The sector as a whole is calculated to be overvalued, but the level of overvaluation is mild compared to that found in the Basic Materials and Energy sectors. 

  Below, you can see our results.  These stocks are ranked by composite score.  They are all rated "Buy" or "Strong Buy."

Ticker Name Mkt Price Valuation (%) Last 12-M Retn(%) Forecast 1-Month Retn(%) Forecast 1-Yr Retn(%) P/E Ratio Industry
ICGE INTERNET CAP GP 13.06 -75 91.78 4.02 10.82 16.42 INTERNET SERVICES
NOC NORTHROP GRUMMN 64.38 -9.07 18.39 3.74 18.47 10.6 AEROSPACE/DEFENSE
BA BOEING CO 66.23 -5.79 21.61 3.92 16.58 15.73 AEROSPACE/DEFENSE
GD GENL DYNAMICS 68.73 -2.04 3.77 4.17 19.25 10.28 AEROSPACE/DEFENSE
LLL L-3 COMM HLDGS 72.51 -15.04 -11.14 4.15 21.29 8.89 ELECTRONICS-MILITARY SYS
RTN RAYTHEON CO 47.2 -8.85 -8.01 3.97 18.95 9.61 ELECTRONICS-MILITARY SYS
TNE TELENORTE L ADR 14.35 -19.99 -35.45 3.67 15.06 5.84 WIRELINE - NON-US
LMT LOCKHEED MARTIN 69.45 -1.81 -8.5 3.98 17.92 9.78 AEROSPACE/DEFENSE
MTG MGIC INVSTMT CP 9.05 -65.05 74.71 6.02 40.78     N/A INSURANCE-MULTI LINE
ATK ALLIANT TECHSYS 77.8 -10.14 -12.51 4.19 21.85 8.58 AEROSPACE/DEFENSE EQUIP
CSR CHINA SEC&SURV 5.03 -45.23 -27.94 4.46 21.04 4.96 PROTECTION-SFTY EQ & SVC
LNG CHENIERE ENERGY 5.34 -75 172.45 4.69 20.99     N/A OIL & GAS-U S EXPLO & PROD
SATC SATCON TECH CRP 4.07 -44.87 80.09 9.66 31.22     N/A ELEC PRODUCTS-MISC
MNTA MOMENTA PHARMA 15.18 -17.31 41.16 3.77 15.24 91.51 MEDICAL-BIOMED/GENETICS
TGI TRIUMPH GRP INC 89.17 43.61 78.09 4.26 14.1 15.03 AEROSPACE/DEFENSE EQUIP

  Subscribers can check out the latest figures on the Aerospace Sector from our models HERE.

 Seeking Alpha Readers should check out our Seeking Alpha VE Investment App HERE

Market Indices Data
  Latest Change YTD
Dow Jones
11,363.80 4.62 8.97%
NASDAQ Composite
2,606.86 8.37 14.88%
Russell 2000
765.90 1.48 20.79%
S&P 500
1,225.82 2.07 9.93%

 

ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
41.52%
Stocks Overvalued
58.48%
Stocks Undervalued by 20%
19.29%
Stocks Overvalued by 20%
25.3%

 

ValuEngine Sector Overview
Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Basic Materials -0.98% 3.16% 29.89% 26.45% overvalued 67.57% 36.79
Oils-Energy -0.42% 2.77% 16.38% 21.27% overvalued 44.69% 40.13
Auto-Tires-Trucks 0.22% 5.46% 53.51% 12.91% overvalued 56.59% 25.49
Multi-Sector Conglomerates -0.16% 1.75% 22.98% 12.18% overvalued 32.31% 28.70
Industrial Products 0.19% 2.66% 22.37% 11.20% overvalued 30.01% 24.77
Transportation 0.25% 2.42% 24.55% 10.56% overvalued 30.05% 42.43
Retail-Wholesale 0.24% 1.41% 19.36% 9.59% overvalued 60.96% 22.18
Consumer Staples 0.75% 2.10% 10.13% 8.17% overvalued 16.46% 26.64
Utilities -0.21% 0.51% 5.33% 6.01% overvalued 13.84% 24.64
Aerospace 0.38% 2.22% 20.15% 5.67% overvalued 30.78% 19.32
Computer and Technology 0.13% 2.75% 26.54% 5.14% overvalued 33.45% 43.09
Finance 0.19% 2.01% 15.27% 4.61% overvalued 15.90% 23.97
Consumer Discretionary -0.03% 1.74% 21.40% 4.43% overvalued 28.09% 30.98
Business Services 0.42% 3.03% 12.55% 4.20% overvalued 21.95% 29.43
Construction 0.28% 4.57% 7.90% 2.81% overvalued 10.32% 35.91
Medical 0.25% 1.34% 12.27% 8.21% undervalued 20.33% 36.50

 

 
 
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Stocks: ACTA, NOC, BA, GD, LLL, RTN, TNE, LMT, MTG, OA, CSR, LNGQ, MNTA, TGI