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Aerospace/Defense Products and Services

AAR Corporation
In 2015 the company unload some assets, selling Telair Cargo Group Precision Systems Manufacturing. I thought that was a mistake at the time. Turns out, it was the right thing to do. The company was becoming debt heavy. But selling off Telair and Precision allowed the company to reduct it’s debt by 76%. Management has been smart and allowing very little new debt. This has allowed the compnay to do what it does best, which is to provide maintenance and repair services to aircraft. That is reflected in the FY 2017 numbers with the company ending the year with 936% increase in y-o-y free cash flow, an 18% increase in y-o-y earnings, against a y-o-y increase in debt of 6%. Not a bad take-off from a prior crummy landing.

AAR Corporation (NYSE: AIR) – FYE 05/2017 – OVER VALUED – The stock is trading at levels above my current $24 fair value estimate – Please See Linked Worksheet


AeroVironment, Inc. (Nasdaq: AVAV) – FYE 04/2016


Honeywell International, Inc.
I see this over and over and it just makes me wonder how can the price of the stock go up? Last year the company spent almost $2.6B on acquisitions. Those FY16 acquisitions translated into FY17 y-o-y changes of; an increase in sales of 3%, a decrease in earnings of 66%, a decrease in free cash flow of 65%, and an increase in debt of 13%. This performance was rewarded with a y-o-y increase in the stock price of 24%. Talk about things that make me go huh?

So what’s ahead. Well a prior five year hold of the stock would have returned an average of 29% per year. My current future target price for the stock based on a five year hold is $273, which is an average annual return of 15%. As is always the case, please keep in mind that any investment is the potential for loss and that past performance is no guarantee of future results.

Honeywell International, Inc. (NYSE: HON) – FYE 12/2017 – OVER VALUED – The stock is currently trading at levels above my most recent fair value estimate – Please See Linked Worksheet


Huntington Ingalls Industries, Inc. (NYSE: HII)
The stock is OVER VALUED basis my most recent $132 fair value estimate. Please See Linked Worksheet
Posted on 03/07/18


Kaman Corporation (Nasdaq: KAMN) – FYE 12/2015


Orbital ATK, Inc. (NYSE: OA) – FYE 12/2017 OVER VALUED The stock is currently trading at levels above my most recent $42 close target. Please See Linked Worksheet
Posted on 04/05/18


Triumph Group, Inc. (NYSE: TGI) – FYE 03/2017

Please note that worksheets are updated basis the most current SEC 10-K ANNUAL filing.