On Jan 7, 2014, Zacks Investment Research upgraded
Alliant Techsystems Inc.
) to a Zacks Rank #1 (Strong Buy).
ALLIANT TECHSYS (ATK): Free Stock Analysis
ASTRONICS CORP (ATRO): Free Stock Analysis
B/E AEROSPACE (BEAV): Free Stock Analysis
ELBIT SYSTEMS (ESLT): Free Stock Analysis
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Why the Upgrade?
Alliant reported positive earnings surprises in each of the past
4 quarters with an average earnings beat of 13.4%. The company's
long-term expected earnings growth is pegged at 6.1%. The timely
completion of the Bushnell acquisition, synergies from recent
acquisitions and a stable inflow of contracts are expected to
drive the bottom line.
In the second quarter of fiscal 2014, Alliant's top and bottom
line beat the Zacks Consensus Estimate, primarily on the back of
strong contribution from its Sporting segment and a decline in
The company continues to strengthen its product offering under
the Sporting segment, as demand for sporting products is rising
significantly in the U.S. Year to date, the company has completed
two major acquisitions:
In Nov 2013, the company acquired Bushnell Group Holding Inc., a
provider of sports optics, outdoor accessories, performance
eyewear and affordable sports products for sports fans. Bushnell
has been merged with Alliant's Sporting segment.
In addition, Alliant took over Caliber Company in Jun 2013, with
a transaction value of $315 million. The acquired unit added $57
million to revenues in the second quarter of fiscal 2014.
An acquisition-driven strategy will enable the company to expand
its existing footprint besides providing both financial as well
as operational synergies.
Alliant also has a steady dividend payment record. During the
first six months ended Sep 29, 2013, the company paid common
stock dividends of $16.7 million. The practice of returning
wealth to shareholders will help keep investor interest in the
The present valuation also makes Alliant attractive. As of Jan 6,
2013, the company's forward P/E multiple was 12.9x, a discount of
5.8% to the peer group average of 13.7x. Return on equity of the
company was 19.1%, marginally higher than the peer group average.
Other Stocks to Consider
Some other stocks worth considering in the aerospace and defense
equipment industry include
Elbit Systems Ltd.
B/E Aerospace Inc.
). While Elbit Systems holds a Zacks Rank #1 (Strong Buy),
Astronics and B/E Aerospace carry a Zacks Rank #2 (Buy).