LMT for the Long-Term -- Time to Fly Again

20 февр. 2021 г.

Time and time again LMT has been a stellar stock.

Now, let's start with why they may be down over the last few months:
- Plane sales are declining due to COVID -- great, they're about to bounce back, look at BA for comparison
- Democrats in office - okay, but have they ever actually decreased military spending drastically? I think LMT will be just fine under a Biden admin

Long Term Potential:
- Jets: F-35 program is great! New F-16 maintenance contract for 64B, amazing!
- Space: Even without the AJRD acquisition (which could still happen), LMT has >20% revenue related to space

Fundamentals:
- PE of 13.91
- EV/EBITDA of 11.18
- Market Cap of ~94B over an annual revenue of 65.4B (1.43x) -- Revenue grew >9% despite COVID (2020/2019) whereas the stock fell from ~410 to ~360 in 2020 alone (~12%)... it's now down from ~440 COVID high to ~340 now (~23%)
- 3.10% yield
- 1.39 quick ratio
- Earnings in late January missed (barely) and we went down to ~320, but I think we're ready to bounce and to get out of here. We're at ~340 now... plenty of room to set a new lower high and to change momentum to the bulls

Technical:
- Who cares?! We've been going down... a lot... but we've gone down so much that fundamentals are back in play!
- We're seeing some downward pressure / resistance, but I read that we are now consolidating on Long-Term support
- Weekly RSI <40; Monthly RSI <50
- Weekly MACD is lower than the COVID low

Conclusion:
If LMT goes below 300, call me wrong, but based on both fundamentals and technical, this seems like an amazing opportunity to buy for the long-term. Let's aim for ~440 or ~420 (pre or post COVID highs respectively) and then even higher from there!