Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 12 Aug, 24 | HII | Buy | USD 263.73 | USD 285.0 | USD 310.0 | 17 days | 17.5% |
Data Powered by EOD Historical Data (“EODHD”).
Huntington Ingalls Industries, Inc. engages in designing, building, overhauling, and repairing military ships in the United States. It operates through three segments: Ingalls, Newport News, and Mission Technologies. The company is involved in the design and construction of non-nuclear ships comprising amphibious assault ships; expeditionary warfare ships; surface combatants; and national security cutters for the U.S. Navy and U.S. Coast Guard. It also provides nuclear-powered ships, such as aircraft carriers and submarines, as well as refueling and overhaul, and inactivation services of nuclear-powered aircraft carriers. In addition, the company offers naval nuclear support services, including fleet services comprising design, construction, maintenance, and disposal activities for in-service the U.S. Navy nuclear ships; and maintenance services on nuclear reactor prototypes. Further, it provides life-cycle sustainment services to the U.S. Navy fleet and other maritime customers; high-end information technology and mission-based solutions for Department of Defense (DoD), intelligence, and federal civilian customers; nuclear management and operations and environmental management services for the Department of Energy, DoD, state and local governments, and private sector companies; fleet sustainment; nuclear and environmental services; and unmanned systems. Huntington Ingalls Industries, Inc. was founded in 1886 and is headquartered in Newport News, Virginia.
Improving Profitability: Net Margin of 5.5% in Q1 FY24 vs 4.8% in Q1 FY23
Lower Credit Risk Exposure: Debt-Equity Ratio of 0.59x in Q1 FY24 vs 0.81x in Q1 FY23
Operating Inefficiency: Asset Turnover of 0.25x in Q1 FY24 vs Industry Median of 0.18x
Lower Liquidity: Current Ratio of 0.96x in Q1 FY24 vs Industry Median of 2.03x
Dependence on U.S. Government Contracts, Large-scale Project Management, Defense Budget Variability, Geopolitical Uncertainty, Technological Advancements, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 263.73 | 220.0 | 285.0 | 310.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
The Relative Strength Index (RSI) over a 14-day period stands at a value of 52.97, upward trending, with the price taking reversal from an important support zone of USD 250.00-USD 260.00, with expectations of some support if these levels sustain. Additionally, the stock's current positioning is above both 50-Day SMA and 200-Day SMA, which can act as a short to medium term support levels.
As per the above-mentioned price action, momentum in the stock over the last month, current macroeconomic scenarios, recent business & financial updates, and technical indicators analysis, a ‘BUY’ rating has been given to Huntington Ingalls Industries, Inc. (NYSE: HII) at the closing market price of USD 263.73 as of August 12, 2024
Data Powered by EOD Historical Data (“EODHD”).
Sector: Industrials Industry: Aerospace & Defense
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| HII Huntington Ingalls Industries Inc |
1.92 1.02% | 189.85 | 19.23 | 14.56 | 0.91 | 2.71 | 1.15 | 11.27 |
| BA The Boeing Company |
6.23 3.61% | 178.85 | - | 294.12 | 1.68 | - | 2.25 | 111.56 |
| EADSY Airbus Group NV |
-0.12 0.29% | 40.57 | 27.76 | 21.51 | 1.93 | 7.21 | 1.79 | 13.93 |
| EADSF Airbus Group SE |
- -% | 165.40 | 27.24 | 21.28 | 1.91 | 7.14 | 1.79 | 13.93 |
| RTX Raytheon Technologies Corp |
1.73 1.51% | 116.18 | 38.65 | 15.77 | 1.77 | 1.69 | 2.22 | 16.02 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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