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Stephen Weiss, Founder, Short Hills Capital Partners Leidos LDOS-N BUY May 01, 2024

Since new management started a year ago, each quarter has bested the last. Just reported a super quarter. Is cheap, well-positioned and defensive.

$142.000

Stock price when the opinion was issued

Defense
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BUY

Was up yesterday during the market sell-off. Had a great quarter. Stocks remains cheap under new management.


BUY

They just had a great earnings report and is trying to break above 2020 highs.

BUY ON WEAKNESS

He bought more today. It's defensive; its defense business amounts to 15% of their revenues and is focused on technology. Also produces healthcare and airport scanners. Good, new managers. He'd buy on dips. 

BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

LDOS is a $20B market cap company providing scientific, engineering and technical services. The stock is up 36% YTD and 90% over one year. It trades at 16X earnings, with a 1.03% dividend. Historical growth has been very solid, and it generates good cash flow. The last quarter was excellent and EPS beat estimates by 35%. Estimates have also been moving up. There is a lot to like here for sure. Our main concern would be debt, at about 4X cash flow. But based on its growth and execution we would not see this as particularly problematic. 
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Curated by Allan Tong since 2019.
99+ opinions with 4.15 rating.

TOP PICK

A month ago, this defense company reported total revenues of $3.98 billion which beat the street's $3.8 billion and rose 4.2% year-over-year as operating income climbed from $265 million to $415 million (all USD) in that time. The operating margin expanded from 7.2% to 10.4% as total incomes declined 9.3%. The future looks positive with a backlog of $36.57 billion. To cap it off, the company raised its full-year earnings guidance from $7.50-7.90 to $8.40-8.80 per share and cash flow from $1.1 billion to $1.3 billion. After Leidos reported this beat, the stock and made fresh 52-week highs in the weeks that followed. It's come back a bit which makes it an attractive entry point.

BUY

87% recurring revenues. He spoke to the CEO last week and confirmed and beat his expectations.

BUY

They report a great quarter yesterday. They have a lot more to do and have a lot of room to run.

BUY ON WEAKNESS

It hit a new high just a few days ago though has slid, down 6.5% today over uncertainty of where the US defence will spend its budget. Now, is a buying opportunity.