BAE Systems plc (BA.L) $BA.L #Stocks Under-the-Radar Stock Ready to Bounce
May See a Big Move
BAE Systems
Ticker: BA.L
Price: GBP 509.00
BAE Systems has been awarded a contract worth almost £2 million to provide six Pacific 24 (P24) Rigid Inflatable Boats (RIBs) to Austal, based in Australia.
The RIBs, built and customised in BAE Systems’ Boats factory in Portsmouth, UK are being supplied to Austal to equip two Cape-class Patrol Boats they are building for the Trinidad and Tobago Coast Guard.
The P24 is a small and agile boat that can be deployed for a variety of tasks from counter-piracy and counter-narcotics missions, to force protection, rescue and logistics operations. It is used by a number of military customers, including the Royal Navy, but its versatility, fuel-efficiency and high-tech construction also lends itself to use by civil customers too. The MKIV version of the P24 incorporates the latest technologies in hull construction, including improved shock mitigation and propulsion, and provides extra safety to craft and crew by complying with rigorous Safety of Life at Sea (SOLAS) testing procedures, including drops, slams and self-righting trials, making them the vessel of choice for coast guard work.
Austal Head of Supply Chain and General Manager New Builds (Australia), Ben Wardle, said: “The MKIV Pacific 24 from BAE Systems was the first choice of sea boat for the Trinidad and Tobago Coast Guard.
“Our customer needs assurance that their sea boats can perform in life and death scenarios in harsh maritime environments, including in tropical storm and hurricane conditions. The pedigree of the P24, with its range of international customers including the military, as well as its SOLAS accreditation made it the ideal vessel for the job.”
The P24’s seating arrangements – six passengers and two crew – will also be specially configured for coast guard operations, including the ability to remove seats in order to boost carrying capacity and carry different loads including stretcher patients or different numbers of passengers.
In addition to the standard technical features of the MKIV P24 boat, custom modifications supplied to Austal included the installation of a ground plate that will enable Austal to supply and fit its own radio communications system.
Dr. Brooke Hoskins, Director of Products and Training Services for BAE Systems’ Maritime Services business, said: “It’s great to see our P24s on their way to deliver an enhanced capability for the government of Trinidad and Tobago Coast Guard in collaboration with Austal.
“We have more than 60 years’ experience of producing specialist high-speed craft for military and civilian customers that include Special Forces, navies, armies, air forces and governments in more than 40 countries around the world. I am confident that the Trinidad and Tobago Coast Guard will be as delighted with them as all our other customers are.”
BAE Systems’ other high-performance sea boats include the Arctic range, a sea boat known for its speed, payload versatility and boarding ability, as used by Coastguard agencies and Lifeboat services, and the Seakeeper 7 series, a load-carrying Logistic Support Boat (LSB).
In the UK the P24 is used extensively in the Royal Navy’s surface fleet, being embarked on a number of warships and Royal Fleet Auxiliary vessels. These include the UK’s new aircraft carriers, HMS Queen Elizabeth and HMS Prince of Wales, all its Type 45 destroyers, Type 23 frigates and Offshore Patrol Vessels.
Business Summary
BAE Systems plc is a defense, aerospace and security company.
The Company operates through five segments.
The Electronic Systems segment consists of the Company’s United States and United Kingdom-based electronics activities.
The Cyber & Intelligence segment consists of its United States-based Intelligence & Security business and United Kingdom-based Applied Intelligence business, and covers the Company’s cyber, secure government, and commercial and financial security activities.
The Platforms & Services (US) segment, with operations in the United States, United Kingdom and Sweden, produces combat vehicles, weapons and munitions.
Air segment comprises the Company’s United Kingdom-based air activities for European and international markets, and United States programmes, and its businesses in Saudi Arabia and Australia, together with its interest in the MBDA Holdings SAS (MBDA) joint venture. Maritime segment comprises the Company’s United Kingdom-based maritime and land activities.
Shayne Heffernan Trade Idea
“Our current price target of BAE Systems will come in around GBP 622.37 giving the stock a price increase of +22.27%.”
Price Performance
Relative Valuation
Technical Indicators
Overall, the bias in prices is: Downwards.
The projected upper bound is: 543.67.
The projected lower bound is: 473.53.
The projected closing price is: 508.60.
Candlesticks
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 28 black candles for a net of 7 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 57.8571. This is not an overbought or oversold reading. The last signal was a buy 4 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 50.04. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 61 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -34. This is not a topping or bottoming area. The last signal was a sell 8 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.
Rex Takasugi – TD Profile
BAE SYSTEMS closed up 2.000 at 509.000. Volume was 29% below average (neutral) and Bollinger Bands were 56% narrower than normal.
Open High Low Close Volume 507.600 511.000 505.800 509.000 6,476,273
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 508.70 510.88 560.40 Volatility: 26 43 42 Volume: 8,580,102 8,066,230 7,114,064
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
BAE SYSTEMS is currently 9.2% below its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods.
Our volume indicators reflect moderate flows of volume into BAES.L (mildly bullish). Our trend forecasting oscillators are currently bullish on BAES.L and have had this outlook for the last 11 periods.
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Sources:
BAE Systems Company Website
Thomson Reuters Metastock and Eikon financial tools
Disclosure: we hold no position in BAES.L, either long or short, and we have not been compensated for this article.
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