Trade of the Day: General Dynamics Corporation (GD) Stock Looking Bright After the Election

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General Dynamics Corporation: (NYSE:GD) — General Dynamics is the world’s fourth-largest military contractor. It is also a leading manufacturer of corporate jets.

Early in November, Standard & Poor’s raised its opinion of GD stock from a “hold” to a four-star “buy” and increased its 12-month target price to $193 from $160. The company is estimated to earn $9.73 this year, up from $9.08 in 2015, and S&P estimates EPS of $10.03 in 2017. They estimate that with a win by Donald Trump, defense group spending will increase and names like General Dynamics Corporation, which makes traditional military hardware, will be the focus of spending by the new administration.

The company has a significant backlog of orders for large-cabin aircraft, and S&P expects production of its new G650 and G280 aircraft to contribute to an expansion of profit margins. GD is expected to increase its dividend and stock repurchase plans. The stock’s current annual dividend is $3.04, providing a dividend yield of 1.8%.

Technically, GD stock recently broke from a Cup-&-Handle formation on very high volume. The breakout opened a break-away gap as it sliced through its 50-day moving average to a new all-time high at $170.

Despite profit-taking in the overall market, yesterday GD closed at a new all-time high on above-average volume. However, profit-taking could still occur as uncertainties mount regarding an election recount. Thus it would be prudent to buy a half position in GD now and wait for a pullback to add to it at $165.

The trading target for this A-rated stock is $190, however investors may purchase General Dynamics as a long-term representative in the aerospace/defense sector.

GD B165 T190
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GD Stock: General Dynamics Corporation Looking Bright After the Election


Article printed from InvestorPlace Media, https://investorplace.com/2016/11/trade-of-the-day-general-dynamics-corporation-gd-bright/.

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