Today, 03/07/22, at 10:28 AM, the market price for Huntington Ingalls Industries reached my preset sales price of $226 per share netting the Value Investment Fund $225 per share after transaction fees. Initial investment on 11/30/2021 was $20,000 including transaction fees (Purchased HII). Total number of shares purchased and sold was 112.9943 shares. Capital gain from this transaction was $5,423.72. During this 98 day holding period, the Fund earned $133.33 in dividends. Total earnings over 98 days were $5,557.05 for an absolute return on the $20,000 investment of 27.785%. Annualized, this equals 103.48%.
Market price reflects what a willing buyer and a willing seller agree to an exchange of resources; i.e. a buyer paying cash for a seller’s goods or services. A common depiction is a street market of goods with many buyers all negotiating and bartering for an exchange.
The largest subsidiary of Huntington Ingalls Industries is their Newport News Shipbuilding division. They are the sole builder of the United States Navy’s aircraft carriers. Newport News Shipbuilding has been in business for over 140 years. Huntington Ingalls Industries has three distinct segments of operations. In addition to Newport News Shipbuilding, Huntington Ingalls Industries has its Ingalls division which builds non-nuclear combatant vessels including Coast Guard Cutters. A third division is their Technical Solutions segment which provides intelligence services to the Navy. With 44,000 employees and a backlog of $50 Billion of work, Huntington Ingalls Industries is an excellent inclusion in any value investing portfolio. With this site’s Value Investment Fund, this particular company is included in the Military Contractor’s Pool of investments.
The current market price as of November 20, 2021 is around $185 share. With 40.6 Million shares in the market, its market value is around $7.5 Billion. Therefore, this company is considered a mid-cap investment. However, the company consistently generates increasing amounts of revenue and outstanding profits. For investors, it also pays excellent dividends that often exceed a 2.5% dividend yield. The risk associated with a deep decline with the stock’s price is practically non-existent and more importantly, even if one occurred, the likelihood it will stay depressed for more than two years is remote. Even though this company falls within the mid-capitalization group of investments, it behaves like a large-cap. Simply stated, if a value investor can snap up shares at a good price, odds are, the investment will provide superior returns when the stock’s price returns to a favorable market price. The questions are now: ‘What is Huntington Ingalls Industries, Inc.’s intrinsic value, value investing buy price and the market recovery price for the purpose of value investing?’.