An Aerospace Giant Emerges in the Alpha Algorithm

Founded in 1939 and based in Falls Church, Virginia, Northrop Grumman Corporation (NOC) provides systems, products and solutions in aerospace, electronics, information systems and technical service areas to government and commercial customers worldwide.

Northrop Grumman Corporation (NOC) versus the S&P 500 YTD

Nine Top Investment Strategies Betting on Northrop Grumman Corporation (NOC)

1. Capital Strength

This strategy seeks to outperform the market by selecting companies based on the strength of their balance sheets, long-term debt ratios and return on assets (ROA).

2. High Quality Stock

The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.

3. Low Interest Rate Sensitivity 

A large-cap U.S. stock selected for its low volatility and positive price performance in a rising interest rate environment.

4. Exponential Technologies

The stock is part of a strategy that invests in nine different fields deemed to be vast growth “exponential technologies”: big data and analytics, nanotechnology, medicine, networks, energy and environmental systems, robotics, 3-D printing, bioinformatics and financial services.

5. Large-Cap Growth and Value

Using a proprietary ranking based on separate models for growth and value, this is a large-cap stock that is part of an index that has historically outperformed its market-cap-weighted benchmark.

6. Shareholder Yield

Includes companies that are (a) paying cash dividends, (b) engaging in net share repurchases, and (c) paying down debt on their balance sheets.

7. Share Buybacks

Company’s shares outstanding have been reduced by at least 5% in the previous year through share repurchases.

8. Momentum Model

 The stock is among the top approximately 100 U.S.-listed companies to demonstrate powerful strength characteristics relative to the 3,000 largest U.S.-listed companies.

9. Momentum Factor

The stock is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

Recommendation

Buy Northrop Grumman Corp (NOC) at market today. Place your initial stop at $200.00.

I am holding off on recommending options at this time.

Portfolio Update

Raise your stop in Facebook Inc. (FB) to $129.90 to lock in at least a 10% gain in this position.

Your put option positions in Visa (V), Microsoft (MSFT) and Amazon (AMZN) are currently in the red.

While the market has been unusually strong in August, it is very technically overbought, and I still expect a pullback in the market in the coming weeks. Should this happen, I believe it will act as a positive on your speculative short positions.

Sincerely,

Nicholas A. Vardy