General Dynamics Corporation (NYSE: GD): Stock That Needs Special Handling

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Wellington Management Co. LLP recently announced the acquisition of new stake in General Dynamics Corporation (NYSE:GD). The institutional investor has increased its shareholding in the Industrials company by 16.27% to 15.59 million shares with purchase of 2.18 million shares. This fresh investment now brings its stake to 5.43% valued currently at $2.33 billion. In addition, Wells Fargo Clearing Services LLC raised its holdings by 0.1 million to 4.99 million shares.

With over 2.0 million General Dynamics Corporation (GD) shares trading Wednesday and a closing price of $145.79 on the day, the dollar volume was approximately $291.56 million. The shares have shown a positive weekly performance of 1.31% and its price on 07/15/20 gained nearly 1.70%. Currently, there are 288.57M common shares owned by the public and among those 266.60M shares have been available to trade.

Incidentally, analysts’ outlook for the General Dynamics Corporation stock is 2.00 for the next 12 months.

Insiders at the company have transacted a total of 169 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 100 of these insider trades were purchases, accounting for 1,096,641 shares. Insider sales of the common stock occurred on 69 occasions, with total insider shares sold totaling 967,792 shares.

The top 3 mutual fund holders in General Dynamics Corporation are Vanguard Total Stock Market Index, Vanguard Dividend Growth Fund, and American Funds Investment Company. Vanguard Total Stock Market Index owns 7.1 million shares of the company’s stock, all valued at over $1.06 billion. The company sold 40025.0 shares recently to bring their total holdings to about 2.47% of the shares outstanding. Vanguard Dividend Growth Fund bought 0.72 million shares to see its total holdings expand to 6.6 million shares valued at over $986.07 million and representing 2.30% of the shares outstanding. American Funds Investment Company sold -1.59 million shares to bring its total holdings to over 5.32 million shares at a value of $795.48 million. American Funds Investment Company now owns shares totaling to 1.86% of the shares outstanding.

Shares of General Dynamics Corporation (NYSE: GD) opened at $146.85, up $3.49 from a prior closing price of $143.36. However, the script later closed the day at $145.79, up 1.70%. The company’s stock has a 5-day price change of 1.31% and 8.95% over the past three months. GD shares are trading -17.33% year to date (YTD), with the 12-month market performance down to -21.99% lower. It has a 12-month low price of $100.55 and touched a high of $193.76 over the same period. Currently, 2.0 million shares have been traded, compared to an average intraday trading volume of 1.79 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -1.91%, 0.39%, and -9.87% respectively.

Institutional ownership of General Dynamics Corporation (NYSE: GD) shares accounts for 87.30% of the company’s 288.57M shares outstanding. Mutual fund holders own 39.89%, while other institutional holders and individual stakeholders account for 47.24% and 13.62% respectively.

It has a market capitalization of $40.66B and a beta (3y monthly) value of 1.02. The stock’s trailing 12-month PE ratio is 12.30, while the earnings-per-share (ttm) stands at $11.85. The company has a PEG of 2.84 and a Quick Ratio of 1.00 with the debt-to-equity ratio at 1.36. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.50% over the week and 2.44% over the month.

Analysts forecast that General Dynamics Corporation (GD) will achieve an EPS of $2.15 for the current quarter, $2.93 for the next quarter and $12.24 for 2021. The lowest estimate earnings-per-share for the quarter is $1.91 while analysts give the company a high EPS estimate of $2.25. Comparatively, EPS for the current quarter was $2.77 a year ago. Earnings per share for the fiscal year are expected to increase by 6.70%, and 9.14% over the next financial year. EPS should shrink at an annualized rate of 4.34% over the next five years, compared to 8.90% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 20 brokerage firm advisors rate General Dynamics Corporation (GD) as a “Moderate Buy” at a consensus score of 2.00. Specifically, 13 Wall Street analysts polled rate the stock as a buy, while 5 of the 20 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the GD, a number of firms have released research notes about the stock. RBC Capital Mkts stated their Outperform rating for the stock in a research note on May 21, 2020, with the firm’s price target at $157. Seaport Global Securities coverage for the General Dynamics Corporation (GD) stock in a research note released on May 19, 2020 offered a Buy rating with a price target of $188. Citigroup was of a view on April 20, 2020 that the stock is Buy, while Susquehanna gave the stock Positive rating on February 27, 2020, issuing a price target of $210. JP Morgan on their part issued Overweight rating on February 06, 2020.

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