Northrop Stock Story

NOC -  USA Stock  

USD 471.10  14.33  3.14%

As many rational traders are trying to avoid industrials space, it makes sense to go over Northrop Grumman Corp a little further and understand how it stands against Parker-Hannifin Corp and other similar entities. We are going to analyze some of the competitive aspects of both Northrop and Parker-Hannifin.
Published over three months ago
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Will Northrop Grumman (NYSE:NOC) shadow Parker Hannifin Corp price rise?
By analyzing existing basic indicators between Northrop Grumman and Parker-Hannifin, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Parker-Hannifin with a short position in Northrop Grumman. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Northrop Grumman has an asset utilization ratio of 145.39 percent. This suggests that the company is making $1.45 for each dollar of assets. An increasing asset utilization means that Northrop Grumman Corp is more efficient with each dollar of assets it utilizes for everyday operations.

How important is Northrop Grumman's Liquidity

Northrop Grumman financial leverage refers to using borrowed capital as a funding source to finance Northrop Grumman Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Northrop Grumman financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Northrop Grumman's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Northrop Grumman, but it might be worth checking our own buy vs. sell analysis

Bona fide gift to Kathy Warden of 1935 shares of Northrop Grumman subject to Section 16

Legal trades by Northrop Grumman insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Northrop insider trading alert for gift of common stock by Kathy Warden, Chair CEO and President, on 10th of May 2022. This event was filed by Northrop Grumman Corp with SEC on 2022-05-10. Statement of changes in beneficial ownership - SEC Form 4. Kathy Warden currently serves as corporate vice president; president - information systems sector of Northrop Grumman Corp [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper look at Northrop

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now take a look at Northrop Grumman revenue. Based on the latest financial disclosure, Northrop Grumman Corp reported 37.24 B of revenue. This is much higher than that of the Industrials sector and 211.65% higher than that of the Aerospace & Defense industry. The revenue for all United States stocks is significantly lower than that of the stock. As for Parker-Hannifin Corp we see revenue of 14.88 B, which is 24.52% higher than that of the Aerospace & Defense

Northrop37.24 Billion
Sector3.5 Billion
Parker-Hannifin14.88 Billion
37.2 B
14.9 B

Over 3 percent slip for Northrop Grumman. What does it mean for investors?

Current mean deviation is at 0.93. Northrop Grumman Corp exhibits very low volatility with skewness of -2.01 and kurtosis of 10.42. However, we advise investors to further study Northrop Grumman Corp technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Northrop Grumman's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Northrop Grumman's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Northrop Grumman Implied Volatility

Northrop Grumman's implied volatility exposes the market's sentiment of Northrop Grumman Corp stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Northrop Grumman's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Northrop Grumman stock will not fluctuate a lot when Northrop Grumman's options are near their expiration.

The Bottom Line

Whereas some firms in the aerospace & defense industry are either recovering or due for a correction, Northrop may not be as strong as the others in terms of longer-term growth potentials. The bottom line, as of the 27th of January 2022, our actual 90 days buy-hold-sell recommendation on the company is Strong Buy. However, we believe Northrop Grumman is currently overvalued with low chance of financial distress for the next two years.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Northrop Grumman Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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