TECH WORLD: Alliant Techsystems Inc. Generating Terrific Cash Flow

The Mission Systems Group operates in four areas: Weapon Systems, Aerospace Systems, Space Systems, and Technical Services. The Ammunition Systems Group develops and produces military ammunition and gun systems, civil ammunition and accessories, and propellant and energetic materials. The Launch Systems Group produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, and missile defense interceptors.

The company continues to build on market leadership positions in their core businesses and to grow as a leading provider of advanced weapon and space systems. Their ability to successfully compete against larger, more established companies in their industry is due to the company’s size and speed.

Fundamentally, Alliant is solid, with strong earnings growth, attractive return on equity and great cash flow. Latest earnings showed a $1.50 per share representing a 38 percent increase over the same quarter the previous year. In addition, the company announced that they are reaffirming all financial guidance for Fiscal Year 2008. Alliant Techsystems continues to expect fiscal year 2008 earnings per share of $6.15 to $6.25 and sales of $4.0 to $4.1 billion. The company also continues to expect orders of approximately $6.0 billion.

Technically, the stock looks poised to move to the $126 per share area. The stock does have a liquid options market. Alliant does offer LEAPS that currently go out to January of 2010 allowing the options strategist to initiate long-term positions as well.

Figure 1: Daily Elliot Wave-4 Buy Pattern for Alliant Techsystems

Happy Trading.

Jeff Neal 
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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