The aerospace and defense industry might not seem like a great play today but there are still a lot of orders in the pipeline that have to be filled. As the economy recovers some of the suppliers and developers of this industry should see many new orders. One of the biggest recipients of those new orders will be Esterline Technologies Corp (ESL). This stock has been a position in my Financial Tides blog S&P Small Cap Fund on Marketocracy.
Recently they elevated Brad Lawrence to be CEO and he has great plans for this engineering, manufacturing and supplier to defense, commercial aerospace and general industry The main products are GPS technology and display equipment. The are a major supplier to Boeing, Lockheed, Northrop Grumman, General Dynamics and Raytheon. As the industry goes so goes ESL.
Even though the rest of the industry has taken a hit in the last recession ESL hasn't really lost much revenue. With a P/E of only 9.1 compared to Boeing's 17 there is a lot of room for price appreciation.
On a technical basis BarChart rates the company a 96% BUY with only 1 HOLD. The stock has been on a march lately with 9 new highs in the last 20 days with 4 new highs in the last 5 days. Your 65 day price appreciation has been 51%.
Recommendation: ESL is a BUY around 39.50 but because of recent volatility I'd have a tighter than normal stop loss at 35.
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