COL

Rockwell Collins Inc

Industrial/Transportation


Presented:03/28/2016
Price:$91.97
Cap:$12.21B
Current Price:$141.04
Cap:$23.22B

Presented

Date03/28/2016
Price$91.97
Market Cap$12.21B
Ent Value$14.40B
P/E Ratio18.77x
Book Value$14.47
Div Yield1.44%
Shares O/S132.80M
Ave Daily Vol976,834
Short Int4.18%

Current

Price$141.04
Market Cap$23.22B
Rockwell Collins, Inc. engages in designs, produces and supports communications and aviation systems for commercial and military customers and provides information management services through voice and data communication networks and solutions worldwide. The company operates its business through following segments: Commercial Systems, Government Systems and Information Management Services. The Commercial Systems segment supplies aviation electronics systems, products and services to customers located throughout the world. The Government Systems segment provides a broad range of electronic products, systems and services to customers including the U.S. Department of Defense, other ministries of defense, other government agencies and defense contractors around the world. The Information Management Services segment provides communications, systems integration and security solutions across the aviation, airport, rail, transit and nuclear security markets to customers located around the world, which includes commercial airlines, business. Rockwell Collins was founded by Arthur A. Collins on September 22, 1933 and is headquartered in Cedar Rapids, IA.

Publicly traded companies mentioned herein: Rockwell Collins Inc (COL)

Highlights

The presenter is short shares of Rockwell Collins (COL) at $91 and sees the potential for the designer and manufacturer of communications and aviation electronics for commercial and government agencies to fall short of 2016 guidance ($5.55 of EPS). While there may not be any hard catalysts in the near future to point to and the timing of the trade “working” is difficult to gauge, he believes the combination of 1) relatively high and declining margins on government sales, 2) a higher “sustainable” tax rate, 3) weak FCF conversion, and 4) fewer levers to pull to hit numbers, will ultimately weigh on results and the multiple is likely to contract. If his thesis proves to be accurate, a more fair value for the stock is ~$50.

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Idea Discussion

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