General Dynamics Corporation (GD) Shares Have Potential 45.77% Upside

It has been reported that multiple insider activity took place at General Dynamics Corporation (GD). Vice President Whited Gary L sold 14,640 shares for $41,381 in transaction occurred on 2019/03/08. After making this transaction, Vice President owns a direct stake of 6 shares, worth $7,238,707, as per the last closing price. On 2019/02/22 LYLES LESTER L, Director at GD, dumped 4,580 shares at an average price of $172.42 per share. The selling total is valued at $1,352,909.

Vice President, Brady Christopher J had divested 2,327 shares for $10,134 through a trade on 2019/02/04. Following this activity, the insider holds 2 shares worth $1,772,712 as of recent close.

Investment Company Of America revealed as top hedge fund owner in General Dynamics Corporation (GD) with a stake of over 7M GD shares as of December 30, with a market value of approx. $1.1B as of today. The second largest holder, Vanguard Total Stock Market Index Fund, with 6.4M shares which equates to $1.31B worth of the stock. At third is Vanguard 500 Index Fund, which stood pat with 5.19M shares, a 2.12% position in General Dynamics Corporation, worth $1.06B. The insider holding in stood at 0.5% while institutions hold 87.9%.

General Dynamics Corporation (NYSE:GD) rose 2.04% in recent trade and currently has a stock-market value of $49.94B. The shares finished at $174.93, after trading as low as $172.05 earlier in the session. It hit an intraday high Friday at $175.49. Trading activity significantly improved as the volume at ready counter increased to 1,454,065 shares versus 1,104,400 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,367,953 shares. The stock is now 21.59% above against its bear-market low of $143.87 on December 26, 2018. It has retreated -31.33% since it’s 52-week high of $229.74 reached in April. Now the market price is down -19.84% on the year and up 11.27% YTD.

GD stock’s 50 day simple moving average (SMA 50) price is $170.37 and its 200-day simple moving average (SMA 200) price is $180.81. The company’s stock currently has a total float of 271.58M shares. Its weekly volatility is hovering around 1.63% and felt 1.55% volatility in price over a month. On the upside, the share price will test short term resistance at around $176.26. On a downside, the stock is likely to find some support, which begins at $172.82. The failure to get near-term support could push it to $170.72.

It had seen a negative analyst call from Credit Suisse, which downgraded the stock from Outperform to Neutral on February 15. Analysts at Argus, shed their positive views on January 31 by lowering it fromBuy to Hold. Analysts at Susquehanna, made their first call about the stock on January 10, recommending it is Neutral. Jefferies analysts came out with bearish views on January 08 when the call was made. They think the stock is now Hold compared to to their prior call for Buy.

When looking at valuations, General Dynamics Corporation (GD) has a cheap P/E of 15.58x as compared to industry average of 39.3x. Moreover, it trades for 13.46 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 4.37x price/book and 1.38x price/sales. Compared to others, General Dynamics Corporation is in a different league with regards to profitability, having net margins of 9.2%. To put some perspective around this, the industry’s average net margin is 5.78%. GD’s ROE is 27.7%, which is also considerably worse than the industry’s ROE of 114.75%. It’s also very liquid in the near term, with a current ratio of 1.2. The stock has a debt/capital of 1.06.

Shares of GD have dropped -0.6% since the company’s most recent earnings report. Over the past 12 fiscal quarters, General Dynamics Corporation (NYSE:GD) has topped consensus earnings estimates in 11 quarters (91%), missed earnings in 0 quarters (0%), whereas at 1 occasion EPS met analyst expectations. GD last reported earnings that exceeded expectations. The company raked in $3.07 per share, 8.1% change on the same period last year. That was better than consensus for $2.99. Revenue for the recent quarter stood at $10.38 billion, up 25% on last year and below the $10.36 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $9.21 billion to $9.78 billion, which should be compared with $0 generated last year. EPS is seen in a range of $2.6 to $3.22, against the $3.23 reported a year ago.