Nucor Co. (NUE) Shares Sold by Harel Insurance Investments & Financial Services Ltd.

Harel Insurance Investments & Financial Services Ltd. reduced its stake in shares of Nucor Co. (NYSE:NUE) by 31.3% in the second quarter, according to its most recent filing with the SEC. The fund owned 2,200 shares of the basic materials company’s stock after selling 1,000 shares during the period. Harel Insurance Investments & Financial Services Ltd.’s holdings in Nucor were worth $138,000 as of its most recent SEC filing.

Several other hedge funds and other institutional investors also recently bought and sold shares of NUE. Schwab Charles Investment Management Inc. raised its position in Nucor by 3.1% in the 1st quarter. Schwab Charles Investment Management Inc. now owns 1,268,403 shares of the basic materials company’s stock worth $77,487,000 after purchasing an additional 38,495 shares during the period. Sumitomo Mitsui Trust Holdings Inc. raised its position in Nucor by 1.0% in the 1st quarter. Sumitomo Mitsui Trust Holdings Inc. now owns 915,674 shares of the basic materials company’s stock worth $55,939,000 after purchasing an additional 8,677 shares during the period. Alps Advisors Inc. raised its position in Nucor by 9.9% in the 2nd quarter. Alps Advisors Inc. now owns 805,075 shares of the basic materials company’s stock worth $51,187,000 after purchasing an additional 72,509 shares during the period. California Public Employees Retirement System raised its position in Nucor by 10.7% in the 1st quarter. California Public Employees Retirement System now owns 798,442 shares of the basic materials company’s stock worth $48,777,000 after purchasing an additional 77,044 shares during the period. Finally, Stifel Financial Corp raised its position in Nucor by 15.6% in the 1st quarter. Stifel Financial Corp now owns 783,645 shares of the basic materials company’s stock worth $47,875,000 after purchasing an additional 105,716 shares during the period. 77.87% of the stock is owned by institutional investors.

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In other Nucor news, insider Leon J. Topalian sold 3,115 shares of the business’s stock in a transaction dated Thursday, June 21st. The shares were sold at an average price of $64.98, for a total value of $202,412.70. Following the transaction, the insider now owns 43,370 shares in the company, valued at $2,818,182.60. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider David A. Sumoski sold 51,238 shares of the business’s stock in a transaction dated Monday, July 23rd. The shares were sold at an average price of $66.65, for a total transaction of $3,415,012.70. Following the completion of the transaction, the insider now owns 139,839 shares in the company, valued at approximately $9,320,269.35. The disclosure for this sale can be found here. Insiders sold 122,443 shares of company stock worth $8,277,404 in the last 90 days. Corporate insiders own 0.70% of the company’s stock.

A number of brokerages recently commented on NUE. Jefferies Financial Group reiterated a “buy” rating and issued a $80.00 target price on shares of Nucor in a research report on Friday, July 13th. Zacks Investment Research upgraded shares of Nucor from a “hold” rating to a “buy” rating and set a $72.00 target price on the stock in a research report on Thursday, July 12th. KeyCorp upgraded shares of Nucor from a “sector weight” rating to an “overweight” rating and set a $77.00 target price on the stock in a research report on Tuesday, July 24th. Macquarie upgraded shares of Nucor from a “neutral” rating to an “outperform” rating and set a $75.00 target price on the stock in a research report on Thursday, May 17th. Finally, Morgan Stanley lifted their target price on shares of Nucor from $68.00 to $73.00 and gave the stock an “equal weight” rating in a research report on Tuesday, April 17th. Five research analysts have rated the stock with a hold rating and nine have assigned a buy rating to the company. The company presently has a consensus rating of “Buy” and an average price target of $71.16.

Nucor opened at $65.69 on Thursday, Marketbeat reports. Nucor Co. has a 12-month low of $51.67 and a 12-month high of $70.48. The stock has a market capitalization of $21.29 billion, a price-to-earnings ratio of 14.30, a PEG ratio of 0.76 and a beta of 1.57. The company has a debt-to-equity ratio of 0.43, a quick ratio of 1.55 and a current ratio of 3.05.

Nucor (NYSE:NUE) last released its quarterly earnings data on Thursday, July 19th. The basic materials company reported $2.07 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $2.10 by ($0.03). Nucor had a net margin of 7.58% and a return on equity of 16.22%. The firm had revenue of $6.46 billion during the quarter, compared to analysts’ expectations of $6.47 billion. During the same quarter in the previous year, the firm posted $1.00 EPS. Nucor’s revenue was up 24.9% compared to the same quarter last year. equities analysts predict that Nucor Co. will post 7.3 EPS for the current year.

The company also recently disclosed a quarterly dividend, which will be paid on Friday, August 10th. Shareholders of record on Friday, June 29th will be given a $0.38 dividend. This represents a $1.52 dividend on an annualized basis and a dividend yield of 2.31%. The ex-dividend date of this dividend is Thursday, June 28th. Nucor’s payout ratio is 43.30%.

About Nucor

Nucor Corporation manufactures and sells steel and steel products in the United States and internationally. It operates in three segments: Steel Mills, Steel Products, and Raw Materials. The Steel Mills segment produces hot-rolled, cold-rolled, and galvanized sheet steel products; hollow structural section steel tubing, steel electrical conduit, plate steel, and structural steel products; bar steel products, such as blooms, billets, concrete reinforcing and merchant bars, wire rods, and special bar quality; and tubular and plate steel products.

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HSBC Analysts Give Intesa Sanpaolo (ISP) a €3.00 Price Target

Intesa Sanpaolo (BIT:ISP) received a €3.00 ($3.53) price target from stock analysts at HSBC in a research report issued to clients and investors on Thursday. The brokerage presently has a “buy” rating on the stock. HSBC’s target price points to a potential downside of 2.60% from the stock’s current price.

Several other equities research analysts have also recently commented on ISP. Deutsche Bank set a €3.20 ($3.76) price target on shares of Intesa Sanpaolo and gave the stock a “buy” rating in a research report on Thursday. Cfra set a €2.70 ($3.18) price target on shares of Intesa Sanpaolo and gave the stock a “neutral” rating in a research report on Thursday. Credit Suisse Group set a €3.00 ($3.53) price target on shares of Intesa Sanpaolo and gave the stock a “buy” rating in a research report on Wednesday, July 25th. JPMorgan Chase & Co. set a €2.90 ($3.41) price target on shares of Intesa Sanpaolo and gave the stock a “neutral” rating in a research report on Thursday. Finally, Royal Bank of Canada reiterated a “neutral” rating on shares of Intesa Sanpaolo in a research report on Wednesday. One research analyst has rated the stock with a sell rating, nine have assigned a hold rating and ten have issued a buy rating to the company’s stock. The company currently has an average rating of “Hold” and a consensus target price of €3.07 ($3.61).

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Shares of BIT:ISP traded up €0.06 ($0.07) during trading on Thursday, hitting €3.08 ($3.62). 234,460,000 shares of the company’s stock were exchanged, compared to its average volume of 107,040,000. Intesa Sanpaolo has a 1-year low of €2.39 ($2.81) and a 1-year high of €3.23 ($3.80).

Intesa Sanpaolo Company Profile

Intesa Sanpaolo S.p.A. provides various banking products and services. It operates through Banca dei Territori, Banking, Internat Subsidiary Banks, Private Banking, and Asset Management business units. The company offers lending and deposit products; corporate, investment banking, and public finance services; industrial credit, factoring, and leasing services; asset management solutions; life and non-life insurance products; and bancassurance and pension fund, and fiduciary services.

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Better Buy: Raytheon Company vs. Huntington Ingalls

Raytheon (NYSE:RTN) and Huntington Ingalls (NYSE:HII), though both major Pentagon contractors, offer two very different profiles to potential investors. Huntington Ingalls is at its heart a metal-bender, a shipbuilding specialist responsible for the Navy's massive carriers and a significant portion of the rest of the fleet. Raytheon meanwhile doesn't make any of the tanks, planes, or ships that show up on military recruitment posters, but its electronics, sensors, and missiles can be found on seemingly every weapons system the Pentagon deploys.

Raytheon is also a much larger company than Huntington Ingalls, generating three-times the revenue and commanding a market capitalization five times greater. But its shares are also more expensive on both a price-to-earnings and price-to-sales.

The companies do have similarities, notably they both figure to be among the major beneficiaries of an ongoing surge in Pentagon spending.

Here's a look at the outlook for both Raytheon and Huntington Ingalls, to determine which, if either, is the better buy today.

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Market Cap

TTM Revenue

TTM P/E Ratio

TTM P/S Ratio

TTM Dividend Yield

Raytheon	$56.21B	$25.61B	28.19	2.20	1.66%
Huntington Ingalls	$10.32B	$7.59B	20.40	1.36	1.14%

Source: Yahoo! Finance. Data as of July 27, 2018. TTM = Trailing-twelve months

Rockets firing

Raytheon is a defense specialist focused on areas including precision weapons, anti-missile systems, sensors, and radars, areas of particular interest to the Pentagon and U.S. allies. It's sensor business earlier this year beat out Northrop Grumman to win a high-profile award to supply a sophisticated camera system for Lockheed Martin's F-35 fighter, and its radar units are also the eyes behind Lockheed's THAAD anti-ballistic missile system.

A Raytheon-made Tomahawk cruise missile. Image source: Raytheon.

The company is also the most diverse U.S. prime contractor in terms of international sales, with foreign customers accounting for about one-third of total revenue and more than 40% of its backlog. Raytheon's Patriot missile systems are deployed across the Middle East and in a growing number of European countries.

Raytheon on July 26 reported a second quarter beat thanks to growing missile sales and increased classified work and hiked its fully year revenue guidance by $1 billion to between $28.5 billion and $29.5 billion in sales. The company expects significant orders in the second half of the year for its Tomahawk, Griffin, and other missile systems, but if anything remained conservative on the timing of foreign Patriot and radar orders that could offer additional upside for late 2018 or into 2019.

Caution about foreign sales is advisable, as after a three-year run that saw shares of Raytheon more than double investors of late have been growing increasingly concerned that tough talk from the White House on tariffs and toward NATO would cause some of the U.S.'s closet allies to invest in domestic programs instead of buying U.S. armaments.

Raytheon has argued that its missile systems are somewhat immune to those pressures because of their superior performance on the battlefield, but in the current climate it is likely best not to over-promise.

Investors were also concerned with Raytheon's 2018 cash flow projections. The company said it made a $1.25 billion pension contribution designed to take advantage of tax cut legislation and cut its 2018 effective tax rate from an estimated 18% to about 10.5%. Because of that contribution the company said it expects full-year operational cash flow from continuing operations to come in at between $2.6 billion and $3 billion, down from an earlier estimate of $3.6 billion or $4 billion.

Shares of Raytheon fell 3% in the hours after that cash guidance was released. They recovered much of that loss as the day went on, but the drop can be read as some investor nervousness that after a few good years there might not much further for Raytheon to climb.

Safe harbor

Huntington Ingalls, with vast shipyards in Newport News, Va., and along the U.S. Gulf Coast, is perhaps the best positioned company to take advantage of White House plans to rapidly expand the size of the U.S. Navy in the years to come. While the stated goal to grow the fleet by more than 25% to 350 vessels might not be realistic, it is clear a steady stream of new orders will continue to roll in and additional refurbishment work will be available as the Navy tries to keep existing ships in service longer.

Huntington Ingalls-built USS Gerald R. Ford. Image source: Huntington Ingalls.

Huntington shares, similar to Raytheon, have doubled over the last three years on excitement about increased spending, but also like Raytheon there has been a pullback of late. Shares are off more than 10% from their peak earlier this year after first quarter results raised questions about whether the stock had run too high too quickly.

The logic behind the run-up was solid, as Huntington can boast a backlog of more than $20 billion in projects and hopes to grow revenue by 3% annually over the next five years. CEO Mike Petters, on a call with analysts in May, said this is "the most exciting shipbuilding environment in over 30 years."

RTN and HII data by YCharts

But Huntington Ingalls is in the early stage of some of its key multiyear procurements, and shipbuilding by its nature tends to not be as profitable early in a contract as ramp-up costs are high and margins tend to come under pressure. If the steady flow of new business continues as expected it might be some time before Huntington Ingalls has the more mature product mix that usually leads to higher profits.

All that business and the promise of future earnings is a great problem to have, but it could lead to some choppy sailing for investors in the quarters to come.

The better buy is...

It's easy to make the case that both of these companies are solid stocks to hold, both possessing strong management teams, clear strategies, and a reliable, predictable path to grow both revenue and earnings. However, neither is a clear buy at this moment.

It remains to be seen how quickly all of the new business Huntington Ingalls expects will impact the bottom line, and if the price drop after last quarter's earnings report is any indication Wall Street is in no mood to wait it out. Raytheon meanwhile appears a better bet to show real earnings momentum over the next twelve months, but the stock is already trading at lofty levels, trailing only Lockheed among defense primes in terms of price-to-earnings.

If forced to choose today I'd buy into Raytheon and hope that with business showing no sign of slowing down the current multiples can be sustained as earnings grow, though I still believe there are better bargains to be found in the defense patch.

These are two solid companies, but it is far from certain that either will be able to outperform the market over the quarters to come.