It amazes me sometimes how a Market can be so foolish. I do understand that logic is not a metric that is used frequently in Stocks but every once in a while I come across a tasty nugget.
Let us compare Raytheon which according to Capital IQ is only worth 2 stars while Pandora is worth 5 stars?? WTF, anyone else have a problem grasping this comparison.
Raytheon which is constantly generating Billions in both Revenue and profits . Pays a great dividend. Owns and creates technology that is apex of its industry (TOW missile, Tomahawk missile, Boomerang security system, ect) Just at the new year closed over a Billion dollar deal with Middle East for Missile defense system and that was just one contract. Pandora? Has none of these. Pandora has allot of hope and Mobile add rev. but beyond that? Not much too compare.
So why has Raytheon sold off? With all the instability in the Middle East I for one see Raytheon benefiting. We will not be putting boots on the ground but will be using precision munitions (From Raytheon) to strategically strike ISIS. The demand in the region is already high for Raytheon's products. I see this increasing with current developments.
There was some disappointment from losing the Space Fence Contract to Lockheed Martin. This is why I believe the stock has sold off. I see this as a great buying Opp. Raytheon is a beyond solid company who every quarter shows its mettle and worth. I do not see that changing. Anything below $100 on Raytheon is a strong buy to me. Trading at 15PE the stock is neither cheap nor expensive. Based on the current Macro Geo-Political environment? I see RTN capitalizing and deserving a premium multiple.