Here's Why You Should Invest in Huntington Ingalls Stock
Estimates for Huntington Ingalls Industries, Inc. HII have been revised upward in the past 60 days, which reflects analysts’ optimism in the stock.
The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 6.3% and 2.7% to $17.24 and $ 17.13, respectively.
Shares of Huntington Ingalls have returned 18.6% in the past three months compared with the industry’s rise of 9.2%. The company carries a Zacks Rank #2 (Buy).
Let’s focus on the factors that make Huntington Ingalls a stock to invest in.
Surprise Trend & Year-Over-Year Growth Estimates
Huntington Ingalls pulled off an average positive earnings surprise of 9.48% in the last four quarters. Year-over-year earnings growth for 2018 is estimated at 42.01%. Year-over-year sales growth for 2018 is projected at 5.58%.
VGM Score
Huntington Ingalls has an impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.
Backlog & Long-Term Growth
The company received new orders worth $1.1 billion in the second quarter of 2018. As a result, total backlog reached $21 billion as of Jun 30, 2018. The company has an expected long-term earnings growth rate of 15%.
Largest U.S. Military Shipbuilder
Huntington Ingalls is the prime industrial employer in Virginia. It is the sole designer and manufacturer of nuclear powered aircraft carriers in the United States. More than 70% of the active U.S. Navy fleet consists of Huntington Ingalls ships. With 25 ships under contract for construction at the end of first-quarter, CVN 79 Kennedy achieved approximately 81% structural completion and 47% overhaul completion in the second quarter. The company is anticipating the completion of the DDG 117, NSC 7 and LHA 7 ships in the second half of 2018.
We expect these trends to boost the company in the long run.
Other Stocks to Consider
A few other top-ranked stocks in the same sector are Aerojet Rocketdyne Holdings AJRD, Engility Holdings EGL and Leidos Holdings, Inc LDOS. While Aerojet Rocketdyne sports a Zacks Rank #1 (Strong Buy), Leidos Holdings and Engility carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Aerojet Rocketdyne came up with an average positive earnings surprise of 9.27% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings improved 24.5% to $1.27 in the past 60 days.
Engility Holdings delivered an average positive earnings surprise of 19% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings moved up 16.1% to $2.02 in the past 60 days.
Leidos Holdings pulled off an average positive earnings surprise of 7.56% in the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings inched up 0.2% to $4.40 in the past 60 days.
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