L3 Technologies Hits 52-Week High On Order Flow & Backlog

L3 Technologies, Inc. (NYSE:LLL) hit a new 52-week high of $209.98 during yesterday’s trading session before closing a tad lower at $209.46. The stock has delivered a one-year return of about 40.9%.

Over the past 52 weeks, L3 Technologies’ share price has ranged from a low of $146.88 to a high of $209.98. Average volume of shares traded over the last three months is approximately 0.55 million.

What is Driving L3 Technologies?

L3 Technologies is a consistent performer and has reported positive earnings surprises in each of the last four quarters with an average beat of 9.13%. Its expected long-term earnings growth rate (three to five years) is 6.78%.

Thanks to its quality product offerings, the company continuously receives contracts from the U.S. defense establishments and foreign governments. Funded backlog at the end of third- quarter 2017 was $9 billion, reflecting sequential growth of 5.8%.

Apart from generating substantial organic revenue growth, thanks to its varied product range, L3 Technologies gains from inorganic growth. The strategic acquisitions made by the company have widened its market and created more opportunities.

In addition to its strong presence in the U.S. defense space, the company continues to enjoy a steady flow of Foreign Military Sales (FMS) contracts. The company is expected to benefit from a large addressable international market with sales directly to foreign allied governments and under FMS agreements between the U.S. government and foreign governments.

Other Defense Players Moving Up

Trump’s presidency has been a boon for the Zacks Aerospace sector , which was grappling with the budget sequestration implemented by the prior government. The fiscal 2018 (FY18) defense budget, reflecting a 10% hike from the FY16 level, was a major forerunner for this sector’s growth at the beginning of 2017. Notably, the FY18 defense policy bill worth $700 billion that extensively surpassed Trump's budget request took stocks to new heights.

The increase in the defense budget will also result in new orders for the major defense contractors and will have a positive impact on their performance and prices. Apart from L3 Technologies, other defense operators like Textron Inc. (NYSE:TXT) , Lockheed Martin Corporation (NYSE:LMT) and Northrop Grumman Corporation (NYSE:NOC) also touched their respective 52-week highs yesterday.

Price Movement

L3 Technologies has returned 40.9% in the past year, which is in line with the industry’s gain but much better than the S&P 500’s return of 23.2%.

The company’s performance is driven by its non-platform-centric focus and broad diversification of programs.

Zacks Rank

L3 Technologies has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>