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Huntington Ingalls: Not A "BUY" Now Either


  • Since I wrote my last neutral article on the company, Huntington Ingalls has outperformed the market and appreciated significantly.
  • However, while this outperformance may be justified in the longer term, the short- and medium-term look much more uncertain.
  • I believe it is best to be cautious about this stock at this particular time, and continue to wait for a better entry prior to purchasing.
  • Huntington Ingalls, despite excellent results, is a "HOLD" here.
USS John F Kennedy Under Construction
Photo by Greg Meland/iStock Editorial via Getty Images

I first wrote about Huntington Ingalls Industries (NYSE:HII) back in February, and the company has since that article actually outperformed the market by a bit of a margin. I have a sizeable portfolio slice in HII, but I'm not looking to buy

This article was written by

Wolf Report profile picture

Wolf Report is a senior analyst and private portfolio manager with over 10 years generating value ideas in European and North American markets.

He is a contributing author for the investing group iREIT on Alpha where in addition to the U.S. market, he covers the markets of Scandinavia, Germany, France, UK, Italy, Spain, Portugal and Eastern Europe in search of reasonably valued stock ideas. Learn more.

Analyst’s Disclosure: I am/we are long HII, NOC, RTX, GD, LMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice. It may be structured as such, but it is not financial advice. Investors are required and expected to do their own due diligence and research prior to any investment. Short-term trading, options trading/investment and futures trading are potentially extremely risky investment styles. They generally are not appropriate for someone with limited capital, limited investment experience, or a lack of understanding for the necessary risk tolerance involved. I own the European/Scandinavian tickers (not the ADRs) of all European/Scandinavian companies listed in my articles.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (15)

bengalesq profile picture
I've gone up and down from here holding and am back to neutral. I really like the stock and the company here. That opinion and two bucks will get you a cup of coffee but there it is anyway.
time to grab some?
Osprey70 profile picture
Hi @Wolf Report , is it time to look at HII - Huntington Ingalls again ?Valuations have come down massively. However there seems to be a slow down in earnings growth.
Your analysis would be appreciated.
Regards, Simon
Don Beynon profile picture
Large, Navy shipbuilding is a complex business and can be financially "lumpy". For me HII would be a long term holding and not distracted by quarterly results.
Does anyone know how HHI manages increasing commodity costs? Are high steel prices simply passed through to their government customers? Or will high steel pricing pull down margins in 2021?
I consider HII is a perfect company with a medium upside. My target price is about 276$. I could buy it when it was 160$, but, unfortunately, i didn't do that. Very sad. Nevertheless, if it will be about 200$ I'll be there.
bengalesq profile picture
I shall hold the line for now.
when the entire sector narrows its discount, worry more about concentration rather than missing out on the lower quality players.
Interesting take. You sound like you're standing in front of a mirror and arguing with yourself, not quite able to convince yourself that you're completely committed to your thesis of this article. I bought into HII multiple times over the past year, when it appeared to be substantially undervalued, at least with regard to its historical pricing. It's now a hold for me as well.

SeriousUsername profile picture
As this horrible bull market continues ,prospective returns for the coming years become lower and lower .
It really is depressing,even more so with people actually happy about these silly valuations "yay line go up" ... sigh. Literally the only place in the world where people are happy about things getting more expensive.
AlphaElephant profile picture
@SeriousUsername best comment I read today.
@SeriousUsername TINA rules, unfortunately, or maybe fortunately for some folks.
Long HII.
So ... you were wrong last time but we should really believe you this time? I’ve enjoyed the ride up the past few months and expect further gains in the months ahead. What a great business! Do you have any other stocks you don’t like? I need to make some more money!
Amazing Business! Am writing PUTs at and below and as far out as I can go where I want more more shares. Not a lot of open interest for these instruments and they 'stick' at prices too close to Bid / Ask. Am ready if the price dips!

Thanks for the article!
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