Rockwell Collins
designs manufacturers and supports aviation electronics and mobile and airborne
communication systems, navigation, display and automatic flight control systems
to multinational corporations and defense and electronic system products for
airborne, ground and shipboard applications for domestic government
agencies. The company has grown earnings
and dividends 12-16% annually over the last ten years while earning a 35%+
return on equity. Despite the
sensitivity of the airline and private aircraft industries to the economy, earnings
should continue their long term growth rate due to:
(1) it is the
largest supplier of communications and avionic equipment to both the commercial
and military markets, reducing the volatility of earnings
(2) increasing
its international exposure,
(3) new product
development,
(4) debt
reduction and stock buybacks.
Negatives:
(1)
a majority of its contracts are fixed price creating a
problem if there are cost overruns,
(2)
its exposure to the cyclical aerospace market,
(3)
a large percentage of its sales are overseas so it
subject to foreign laws, regulations and policies.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio
Since 2004
Debt/ EPS Down Net Value Line
Equity ROE Since 2004 Margin Rating
* the majority of companies in COL industry do not pay
a dividend
Chart
Note:
COL stock made good initial progress off its March 2009 low, surpassing the
downtrend off its November 2007 high (red line) and the November 2008 trading
high (green line), Long term the stock
is in an uptrend (straight blue lines).
Intermediate term, it is an uptrend (purple lines). Short term, it is an uptrend (brown
line). The wiggly blue line is on
balance volume. The Aggressive Growth
Portfolio owns a 75% position in COL.
The upper boundary of its Buy Value Range is $46; the lower boundary of
its Sell Half Range is $87.
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