Alliant Techsystems (ATK
) is our newest holding. The company’s Aerospace Systems segment develops and produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, missile defense interceptors, and small and micro-satellites. In addition, it provides composites to military and civil airplane manufacturers. The company’s Defense segment develops and produces military small, medium, and large caliber ammunition. It also provides defense electronics systems, missile subsystems and components, and propulsion and controls systems. Last, in its sporting segment, ATK produces ammunition and sells accessories for local law enforcement departments and the sport hunting/sport enthusiast markets.
We purchased our initial position in ATK below $45, or less than 6x trailing-twelve-months earnings and 55% of revenues to enterprise value. We believe the risk:reward ratio is very attractive at our entry point. At time of writing this commentary, ATK had rallied above $55 or roughly 30% higher than our cost basis.
From FPA Capital’s third quarter commentary