Aerojet Rocketdyne Holdings Inc Ideal for Ukraine/Russia Conflict & Other Hotspots

AJRD Stock a Play on Rising International Tensions

As we all unfortunately know, Russia has invaded Ukraine. And given the situations in other global hotspots, such as the Middle East and the South China Sea, the world has become a more uncertain place.

This means countries like the U.S. and its allies will continue to arm themselves just in case. The risk of international conflicts will help defense companies like Aerojet Rocketdyne Holdings Inc (NYSE:AJRD).

Aerojet Rocketdyne develops propulsion systems and armament systems for space, defense, civil, and commercial applications. For military use, the company builds missile defense systems, advanced defense programs, and space launch systems. (Source: “About Us,” Aerojet Rocketdyne Holdings Inc, last accessed February 25, 2022.)

Aerojet Rocketdyne was in the process of a $4.4-billion ($56.00 per share) takeover by major defense player Lockheed Martin Corporation (NYSE:LMT), but the acquisition was recently pulled off the table due to regulatory concerns. (Source: “Lockheed Martin Terminates Agreement to Acquire Aerojet Rocketdyne,” Lockheed Martin Corporation, February 13, 2022.)

Aerojet Rocketdyne stock jumped in December 2020 after Lockheed Martin announced its bid for the company. AJRD stock was trading as high as $52.32 in February 2021 but plummeted in January 2022 in the lead-up to the Lockheed Martin deal being axed.

Lockheed Martin Corporation could eventually come back to the table, but Aerojet Rocketdyne Holdings Inc has strong upside as a stand-alone company. The pullback in the price of Aerojet Rocketdyne stock means an opportunity for investors as the company ramps up its revenues and profitability.

Aerojet Rocketdyne Stock Could Target $50

AJRD stock fell to a 52-week low of $35.47 on February 24 despite the fact that Aerojet Rocketdyne Holdings Inc benefits from geopolitical instability and conflicts.

Aerojet Rocketdyne stock is below both its 50-day moving average of $41.88 and its 200-day moving average of $44.30. Those two prices are the immediate targets. A break above the moving averages could lift AJRD stock toward $50.00.

Chart courtesy of StockCharts.com

Analyst Take

Aerojet Rocketdyne has strong institutional ownership, with 325 institutions holding a 94% stake in Aerojet Rocketdyne stock. (Source: “Aerojet Rocketdyne Holdings Inc. (AJRD),” Yahoo! Finance, last accessed February 25, 2022.)

Insiders have also been adding AJRD stock to their portfolios. Over the last six months, insiders purchased 73,977 shares.

A retracement by Aerojet Rocketdyne stock to its previous high translates to a return of 40%, which is decent, considering what I view as Aerojet Rocketdyne Holdings Inc’s minimal downside risk and above-average upside potential.