Lockheed Martin (NYSE:LMT) is a global security company engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems and products. It also provides a range of management, engineering, technical, scientific, logistic and information services.
It serves both domestic and international customers with products and services that have defense, civil and commercial applications, with its principal customers being agencies of the U.S. government. It operates in four business segments: Aeronautics, Electronic Systems, Information Systems & Global Services, and Space Systems.
LMT has retraced it gains recently, dropping from $80 to its present level at $77.50. Technically, the stock is making higher lows, usually a sign of accumulation on dips, while the stock has had trouble punching through the $79 level with any conviction. Longer term resistance is at $82.
Lockheed Martin sports a hefty 5% dividend yield and just procured a $6 billion contract from Japan for 42 of its F-35 fighter jets. Additionally, LMT will build 30 F-35 jets for the United States, which will generate an additional $4 billion in revenues. This should provide a decent bump to EPS for the next several quarters.
While growth has tempered, the stock trades at a depressed multiple, under 7 on a forward basis.
Although I’m not anticipating huge upside, I look for LMT to move back to resistance at $82 by June options expiration.
Based on LMT’s current market price of $76.73 and using a target price of $82, a target date of June 15, 2012, and $1,000 of investment capital, this is an excellent candidate for capturing some nice upside by buying a June call, buying the stock or other bullish strategies.
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