On April 3, 2014, the shares of Alliant Techsystems Inc. (ATK) climbed to its 52-week high of $145.40, primarily on the back of strong performance from the company’s Sporting segment, positive impacts from previous acquisitions and steady effort towards maximization of shareholders’ wealth. The share price finally closed at $144.68, up 0.6% from the previous day’s closing.
Alliant Techsystems’ Sporting segment continues to play an important role for strong financial performance. In third-quarter of fiscal 2014, the segment recorded a considerable increase of 78.2% in sales from the prior-year quarter. This upside was primarily driven by the acquisitions of Bushnell Group Holding Inc. and Caliber Company.
Alliant Techsystems noted that the popularity of sporting products is gradually increasing in the U.S. To tap the rising sporting product demand, the company is extending its existing operations through internal expansion activities and inorganic growth strategy. Alliant Techsystems acquired the aforesaid two companies in 2013. Both these firms have a significant presence in the U.S. market and offer different types of rifles and sporting devices. These acquisitions will enable Alliant Techsystems to expand its product offerings and market coverage, thereby meeting increased customer demand.
Apart from expanding operations, Alliant Techsystems also takes several initiatives to improve shareholders’ value. The company has a stable dividend payment history and is currently following a 2-year share-repurchase program, worth $200 million.
It is evident from past records that Alliant Techsystems has strong alliance with the U.S. and foreign defense establishments, the National Aeronautics and Space Administration and several companies. In Jan 2014, the company received order from The Boeing Company (BA) to produce composite components for the latter’s 787 Dreamliner.
Alliant Techsystems currently has a Zacks Rank #2 (Buy). Some other stocks worth considering in the aerospace and defense equipment industry include Astronics Corporation (ATRO) and HEICO Corporation (HEI). While Astronics holds a Zacks Rank #1 (Strong Buy), HEICO carries a Zacks Rank #2 (Buy).