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On April 1, InvestorPlace analyst Matt McCall is revealing details about a little-known corner of the markets that could hand you a fortune during a bear market. To prove it, he’ll share the name of his #1 bear market stock.

Wed, April 1 at 7:00PM ET
 
 
 
 

Trade of the Day: Rockwell Collins, Inc. (COL) Stock Sets Its Sights on 20% Gain

Rockwell Collins, Inc., has been flying high since the election

Rockwell Collins, Inc. (NYSE:COL) — This aerospace & defense company is one of the world’s largest makers of military and commercial avionics and electronics. They manufacture cockpit controls, communications and navigation systems, as well as in-flight entertainment systems.

COL stock is on a Sep 30 fiscal year. In fiscal year 2017, they are expected to report $5.49, and although that is a penny less than FY 2016, it is an increase by S&P from a prior estimate of $5.42. COL reported a December-quarter EPS of $1.20 which beat their estimate of $1.16.

The recent acquisition of B/E Aerospace increases COL’s share in the manufacture of cockpits and aircraft cabins and in the long term should add to the growth of COL. S&P projects FY 2018 sales to rise 4% and EBITDA margins of 24.3% in FY 2017 and 24.6% in FY 2018. S&P’s 12-month target price is $110 and is based on a price-to-earnings ratio of about 20X their FY 2017 EPS.

This estimate could prove to be conservative given improving military spending by the new administration in Washington.

COL recently broke from a resistance line at $95 on a cluster of “buy” signals from my proprietary indicator, the CBR. The line at $95 now becomes a support line, and on Monday, Rockwell Collins successfully tested that line, and by Thursday had jumped over $3.

MACD is turning up and is very close to issuing a “buy,” and volume indicates a balance of buyers since the stock’s low in October. On Dec. 15 the 50-day MA crossed above the 200-MA executing a long-term buy called a Golden Cross. Near- and long-term have turned favorable for COL, and so I suggest trying to buy it at $96 with a six-month trading goal of $115 for a proposed return of almost 20%.

Rockwell Collins pays a dividend of $1.32 for a dividend yield of 1.3%.


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Trade of the Day: Rockwell Collins, Inc. (COL) Stock Sets Its Sights on 20% Gain

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Article printed from InvestorPlace Media, https://investorplace.com/2017/03/rockwell-collins-inc-col-stock-gains/.

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