Huntington Ingalls Industries (HII) is the biggest builder of warships in the Western Hemisphere, and maybe the world. It was cobbled together from three previously independent shipyards in 2001 by Northrop Grumman, which spun it off ten years later. The company’s financial performance has improved steadily since it became independent, and management now predicts that operating margins will nearly double between 2012 and 2015. HII may be the safest bet in a defense sector roiled with uncertainty, because it is the nation’s sole producer of aircraft carriers and amphibious warships, and one of only two producers of complex surface combatants and nuclear-powered subs. In addition to its ship-construction franchises, it gets a steady stream of revenues from refueling and overhauling the vessels it has built. I have written a commentary for Forbes here.
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