David Fried specializes in finding fundamentally strong companies that are also buying back their shares. A recent buy in his The Buyback Letter is defense contractor, Alliant TechSystems (NYSE: ATK)
He explains, "Alliant is a $3.9 billion advanced weapon and space systems company employing some 16,500 people in 21 states. It supplies aerospace and defense products to the U.S. government, allied nations, and prime contractors in the U.S."
Alliant, he notes, recently received a $62.5 million contract from Orbital Sciences Corporation for the main abort motor of the NASA Orion crew exploration vehicle Launch Abort System (LAS).
In addition, he points out that NASA's Orion will succeed the Space Shuttle in transporting humans to and from the International Space Station, as well as carrying crews to the Moon and eventually Mars. In late June, Fried adds, ATK received a contract worth more than $5 million to make rocket motors for the Sidewinder air-to-air missile system.
He says, "A flurry of other recent contracts include its agreement with Lockheed Martin to produce components for the F-35 Lightning II, or the Joint Strike Fighter. The company also signed an $18 million contract to make upgrades to a Navy missile system and a $54 million contract from the Australian Department of Defense, a $125 million contract from the Army to develop a precision guidance kit for artillery, ... the list goes on."
Founded in 1990 and headquartered in Edina, Minnesota, he suggests that Alliant "signaled good news" in May when it raised 2008 guidance. He notes, "In May, ATK reported a smokin' fiscal 4th quarter, with earnings rising 84% on higher sales across its three main business units." Meanwhile, in line with his "buyback" approach, Fried adds, "The company reduced shares outstanding about 6% in the last 12 months."
Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.
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