In all fairness I do have to call it a hunch. This stock will not move until October. Last year everyone thought that they would win the Redford bid worth $895 million. They lost it to BAE. I hate the fact that a military facility paid for by the US taxpayers paid a British company to come into the US and run it, but I guess they can do that. HOWEVER, this puts into question the Lake CIty bid in October. That government contract is 15% of their revenues. If they lose that, it will be a major blow. That's why the buying has stalled and the open interest in November calls are way up. As we know, if the contract is locked in, we will shoot up pretty fast. However, if we do not get that contract, we will fall just as fast. Eagle has had a strong position through the appeal ATK went through last year to try to get that Redford contract back. I am hoping that the move to VA is helping them politically. However, being that Eagle are neighbors to the plant in Lake City, I hope they have some insight as the probability of that contract. It's really hard to believe they would not lighten their position with such a strong factor just a month or so away.
I am afraid the $200 million share buy back is not a defensive move in case they do lose that bid and the price plummets.
Google "BAE wins Redford Bid" and also "BAE Lake City". If you weren't following those bids, you really want to read the story on both of them. For now, I am sticking to calls. I can at least limit my downside without missing an opportunity on the upside. I am just sad they waited so long to diversify. They have really proven how much talent they really have.
What explains the plunge in ATK - almost straight down from $69/share from one year ago? No news ... stock is acting terribly .. looks like some big sellers slowly letting out the line at 100,000 share blocks a day on light volume - no interested buyers - new 52 week low made today. If this pace keeps up the stock will be in the 20s come October.