The Zacks Analyst Blog Highlights: General Dynamics, Huntington Ingalls Industries, Northrop Grumman, Textron and L-3 Communications Holdings - Press Releases

For Immediate Release
 
Chicago, IL – February 11, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the General Dynamics Corp. (GD-Free Report), Huntington Ingalls Industries Inc. (HII-Free Report), Northrop Grumman Corp. (NOC-Free Report), Textron Inc. (TXT-Free Report) and L-3 Communications Holdings Inc. (LLL-Free Report).
 
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Here are highlights from Tuesday’s Analyst Blog:

Defense Stock Roundup

In the last five trading days, investors remained shaky resulting in slender gains for most of the defense majors. General Dynamics Corp. (GD-Free Report) grabbed a big pie from the Pentagon’s funding list apart from announcing investor friendly moves.

Alliant Techsystems Inc. completed its planned merger with Orbital Sciences Corp. while spinning off its sporting-goods business. The legacy space and defense units of Alliant have been merged with the rocket and satellite specialist Orbital.

Although the proposed FY 2016 defense budget is 6.4% higher than the current year budget and about $36 billion more than what sequestration would have allowed, the operators are busy restructuring their businesses and engaging in prudent acquisitions to avert budget austerities.

Investors should at last be happy about Boeing’s shares gaining approximately 22% in the last six-month time frame given its bearish run last year.

(Read Defense Stock Roundup for Feb 3, 2015 for a recap.)

Recap of the Week’s Most Important Stories

1. General Dynamics Corp.‘s C4 Systems business unit won a $415 million contract under which it will provide acquisition lifecycle support to U.S. Army product managers on the Live Training Transformation Product Line framework. The contract runs through Feb 5, 2020 and the Army Program Executive Office for Simulation, Training and Instrumentation, Orlando, Florida is the contracting activity (read more: General Dynamics' Unit Secures $415M DoD Contract).

2. In a separate development, General Dynamics made an investor friendly move as its board of directors approved a 10 million share buyback program of its outstanding common stock. Last year, this defense major had spent about $3.4 billion on share repurchases. Overall, the company spent $4.2 billion in 2014 for creating shareholder value via dividends and share buybacks.

3. Alliant Techsystems Inc. concluded the proposed tax-free spin-off of its Sporting Group business and created an independent company, Vista Outdoor Inc. Following the spin-off, Alliant Techsystems merged its Aerospace and Defense groups with Orbital Sciences Corporation under a tax-free, all-stock transaction. The combined entity is currently operating as Orbital ATK, Inc. The shareholders of Orbital Sciences received 0.449 shares of Orbital ATK common stock for every Orbital Sciences common stock held.

Orbital ATK will commence trading on the New York Stock Exchange under the ticker symbol “OA” today.

The merged entity will serve U.S. as well as international clients with leading positions in the following markets – space launch vehicles and propulsion systems, tactical missiles and defense electronics, satellites and space systems, armament systems and ammunition, and commercial and military aircraft structures and related components.

The merger comes at a vital juncture of the U.S. space industry. The Pentagon is considering U.S. made alternatives to Russian rocket engines which have hitherto been used for various military and intelligence satellite launches.

4. The Navy has awarded Huntington Ingalls Industries Inc. (HII-Free Report) a $224 million modification to a previously awarded contract for advanced planning for the midlife overhaul of the carrier George Washington. The U.S. Navy had previously considered retiring USS George Washington instead of refueling it owing to the tepid budget scenario (read more: Huntington Ingalls Wins RCOH Deal for Washington Carrier).

Performance

Though all the defense stocks climbed higher during the last five trading sessions, the gains were nominal. While Northrop Grumman Corp. (NOC-Free Report) led the pack, General Dynamics and Textron Inc. (TXT-Free Report) ended in the red.

The picture in the past six months was more convincing with no losses being noticed. Northrop Grumman tops the list, followed by L-3 Communications Holdings Inc. (LLL-Free Report).

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GENL DYNAMICS (GD): Free Stock Analysis Report
 
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L-3 COMM HLDGS (LLL): Free Stock Analysis Report
 
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