Curtiss-Wright Corp. (CW)

My yearlong upthumb has been a big loser, with the stock actually slipping while the S&P took off again. Things got even "worse" in Q3, with lowered guidance and vastly decreased revenues leading many investors to jump ship.

So why do I think this company is as good a buy as ever? Almost all of the bad news at CW came out of the Metal Treatment and energy segments, most tied to commercial clients and the overall economy, which has been, surprise, feeble in 2009.

In an environment of government-instigated liquidity, it's the phrases such as "strong increase in sales to our defense markets of $21 million, or 13%, driven by solid growth in both our naval and aerospace defense programs" coupled with "strong growth in our commercial nuclear power market" which make me optimistic. This isn't pie-in-the-sky "wave of the future" stuff; it's political reality. If the loosest spender in town (Uncle Sam) is either buying your products or ordering other people to, you're in a pretty privileged position. And now the stock just got cheaper!

Furthermore, the nine-month numbers aren't nearly as bad, relatively, and it's not like earnings have EVAPORATED. Q3 might be the second-worst of this recession for reports, as investors struggle intellectually to reconcile the recession's theoretical end with ugly year-over-years (remember, '08 Q3 numbers reflect spending which occurred before the serious brake-slamming at the end of '08). I predict the exact opposite in January, with the beginning of 2010 to look downright stunning aside its plain sister, this homely earnings season. A flattening or even an uptick in the beaten-down segments of CW, coupled with accelerated organic growth in the above-mentioned areas, and CW will be on its way back to cruising altitude faster than a taxpayer-funded fighter jet.

I can understanding hating to have bought it in April, but now's not the time to bail.

Showed up on a screen for solid 5 year growth with low debt, cash on hand and still at attractive P/E ratios.

limit 32.00, unanimous

Though the technicals look ugly for CW, I'm going to stay bullish because I like the sector over the next year or so. Economic times like this means companies will invest in equipment and other physical capital rather than in labor, and that should help the market for CW's products.

I don't like playing government investment in "clean energy" or "infrastructure", since it's too subject to the fickle whims of Congress, but there are plenty of reasons to believe that a larger share of America's energy production will come from nuclear sources in the future. C-W will certainly benefit from that.

Metal services division will pick up when infrastructure, industrial, and aerospace recover, which may be a few years. The electronic system division is moderately affected by changes in mil and aerospace but is dealing with that and will outperform. The flow control is not well known to me but will likely do well when oil and nuclear resume facilities and infrastructure building.

Following anticitrade with this one.

See pitch by KatWoman50.

Industrial goods won't do well the coming quarter, and I'm thinking that Obama will cut defense spending. CW doesn't compare well to industry.

CW vs. Industry
P/E: 13.79 v 10
ROE: 11.42 v 19.8%
Div Yield: 1 v 2.91%
Net Profit Margin: 3.37 v 5.5%
EPS vs Qtr 1 Yr ago: -27.4 v -2.3 %
Debt/Equity: 0.7 v 0.65

Bearish evening star pattern, Parabolic SAR sell signal, momentum dropping.

Nuclear industry.

Controls systems for Defense industry. Divisions are quickly picking up. This is a company to watch.

2/6/09 Pitch: Upthumb. Earnings 2/18/09, 10:00 AM. Military supplier with good cash flow, good earnings, good balance sheet. Stock price down.

nuclear power plant parts

Nuclear power.

Strong position in nuclear energy, both power and defense (Navy) applications. Well diversified, and growing both organically and through rapidly accretive acquisitions. Long term holding.

Target: $50+

$50+

The S&P will continue to tank so this is a no-brainer. Intelligent growth driven in part by strategic acquisitions. Top quality Division Managers keep the various divisions profitable even in these tough economic times.

56 nuclear plants in USA coming up on re-certification. Curtiss Wright is the only company in the USA that makes the certified parts and systems.

Critical player in the nuclear power industry providing critical parts for nuclear power facilities. 5 year EPS up 15%.

CW dropped earlier this year, found bottom in April and appears to be heading back up, with a price around $50 it is a discount for LT investment. Expect $75 in a year and $100 by 2 years out.

So we have a large number of older plants and a diminished vendor base. The NRC is concerned about the quality of the parts and components. And nuclear plants always seem to need updated or replacement parts. Indeed, the occasion of renewing the original NRC license involves critical inspections. These inspections often trigger the need for refurbishing or manufacturing new parts. And that is when the telephone rings at Curtiss-Wright Corp.

Good Long Term Stock!

This stock along with the rest of the defense sector is heading higher. Say hello to investors and money managers looking to survive a recession this summer by jumping into defense. Learn to follow the crowd (mutual funds and such)--it consistantly weathers better than navigating against the grain.