Huntington Ingalls Industries, Inc. (NYSE:HII)

CAPS Rating: 4 out of 5

Huntington is in the nuclear aircraft carrier- and submarine-building business and is the sole supplier of nuclear-powered carriers and submarines for the Navy.

Recs

1
Player Avatar Schmacko (59.03) Submitted: 4/6/2011 12:38:07 PM : Underperform Start Price: $40.01 HII Score: +6.12

This is a short term red thumb based around the impending government shutdown and overall weakness in the defense sector. I think there is a good chance of it falling back below the IPO open price since it's initial pop was on a whole bunch of nothing. My other concerns about the stock are in my blog.

Member Avatar Schmacko (59.03) Submitted: 7/1/2011 1:15:43 PM
Recs: 0

I had a bigger follow up the response post that I tried to bang out a few weeks ago, but I think I timed out while writing it and then it was lost and I was too lazy to re type it. My bottom line thinking on this stock is thus:
1. Defense stocks face negative pressure with defense cuts.
2. The less diversified companies that are most dependent on the defense budget, like HII, will perform the worst
3. HII doesn't currently pay a dividend to help bouy up it's share price
4. HII currently trades at a slight P/E premium to other stocks in it's peer group.
5. Given 1-3 above, 4 makes no sense to me = red thumb

Here's your catalyst for HII to go up long term: http://en.wikipedia.org/wiki/Future_Chinese_aircraft_carrier
In 2015-2016 China is expected to have it's first fully functional aircraft carrier. The concept of china with the force projection capabilities of a carrier battlegroup of it's very own will cause a lot of people in the defense department to pee their pants. The desire to stay ahead of China in naval technology/power will ensure HII plenty of work down the road... so in 2015-2020 I expect good things from this stock. Right now though... red thumb.

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