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After spending much of the past six months at a mediocre three-star rank, enough top-performing CAPS members have turned bullish on Northrop Grumman
Industry watchers have become increasingly bullish on the next wave of military spending, which many investors believe will propel Northrop forward in the coming years. The company reported a 7% jump in fourth-quarter revenue in its largest segment, aerospace, and a strong overall quarter. It swung back into the black with earnings of $413 million and total revenues increasing to $8.9 billion. Northrop looks for improving margins and strong cash flow across its businesses this year.
Thanks to its growing electronics and cybersecurity businesses, Northrop expects higher sales and earnings this year. The company aims to benefit from a growing demand for unpiloted aircraft. President Obama's new defense budget calls for a couple of billion dollars targeted toward unmanned aerial vehicles (UAVs). Northrop's rivals, including General Dynamics
With a strong backlog and continued ability to land government contracts, many CAPS members like the momentum behind Northrop and the opportunities it sees ahead.
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Fool contributor Dave Mock recently upgraded his cart with a spanking new donkey. He owns no shares of companies mentioned here. General Dynamics and SAIC are Inside Value recommendations. The Fool's disclosure policy generates warm, fuzzy feelings for all who come across it.