Defense contractor Exelis (XLS) is on pace to post its fifth straight year of declining revenue, and earnings haven’t fared much better. The pros say 2014 is going to be a sixth straight year of weaker revenue, though per-share income is at least expected to improve a bit (from this year’s $1.51 to $1.59 next year).
So what, pray tell, has run the stock up from less than $11 per share in May to the current price of more than $17?
Because Exelis has been winning contracts at a rapid pace of late, and the market recognizes the forward-looking estimates underestimate the opportunity … and at a forward-looking P/E of 11.1, there’s already plenty of value packed in here.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.