"Hedgeye Industrials analyst Jay Van Sciver's duration is longer than mine on this one," writes Hedgeye CEO Keith McCullough. "With the US stock market finally hitting fresh-all-time-highs this week, it also signaled immediate-term overbought for the first time in 2017. On a correction, I’d rather come back to a longer-term name like this. It’s obviously had a great run since the election."
As Van Sciver wrote earlier this week:
- "We aren’t in TXT for 2017 at all. We are in TXT for out year catalysts. Defense product growth, which really gets started with the ship to shore connector in 2018, has the potential to reshape the company..."
- "Tax reform could drive significant growth in private aviation. Consider the demand impact for private aircraft of corporate and partnership tax rates dropping to around 20%."
- "Few companies in our coverage have the degree of favorable exposure to a shift in policy under the Trump administration that Textron does. The company has visibility into many significant programs and policy changes, and our thesis is not based on 2017 results."
- "We continue to think investors will be rewarded for tolerating near-term volatility from current levels."
Click here to continue reading the Textron update we sent to subscribers earlier this week.
