Huntington Ingalls Industries, Inc.
) announced its takeover of The S.M. Stoller Corporation - the
consulting and engineering services provider to the federal
government and private sector. The financial terms of the
transaction were not disclosed.
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Stoller is a privately held company which has given environmental
and technical support to the U.S. government and nuclear power
industry for over 54 years. Its operations span 29 states across
the U.S. with services ranging from managing environmental
issues, to highly complex multi-year remediation projects and
short-term evaluation of local groundwater quality in
anticipation of commercial construction.
With this acquisition, Stoller will be part of Huntington
Ingalls' Newport News Shipbuilding (NNS) division. Hence, this
strategic move will position NNS to enhance its territory within
the DOE, environmental management and commercial nuclear services
Huntington Ingalls' NNS unit designs, builds and refuels
nuclear-powered aircraft carriers and also provides fleet
services for naval ships. Of late, it has been proactive in
expanding its nuclear and manufacturing expertise to the
Department of Energy and alternative energy business ventures.
Its shipyards are also capable of designing and building
Huntington Ingalls ended the third quarter of 2013 with a 46.25%
positive surprise driven by solid program execution at Ingalls
Shipbuilding and Newport News Shipbuilding while it posted a
25.63% positive surprise over the last four quarters on average.
The budget sequester that went into effect at the start of Mar
2013 has a direct bearing on the U.S. government's defense
spending and is a function of the country's fiscal and economic
challenges. The third-quarter earnings season stood testament to
the bullish trend in the defense sphere, defying sequestration
and budget cut woes.
Undeterred by defense budget cuts, the big defense operators are
expanding their operations through acquisitions. Moreover, they
are busy restructuring their businesses. Also, they are keeping
themselves busy on the technological front with new products
Huntington Ingalls presently carries a Zacks Rank #2 (Buy). Other
stocks from the sector that are also presently performing well
Alliant Techsystems Inc.
Lockheed Martin Corp.
Northrop Grumman Corp.
), all with a Zacks Rank #2 (Buy).