Stanley Druckenmiller of Duquesne Capital Management acquired 417,800 shares of defense contractor Raytheon Corp. (RTN, Financial) in the fourth quarter.
Raytheon is an established company that has been able to creatively expand its operations in its 94-year existence. The company has solid financial strength with a GuruFocus ranking of 8/10 in financial strength and a 7/10 profitability and growth rating. In the previous 10 years, the average revenue per share growth rate was 6.60% per year, which is also a good sign, according to GuruFocus.
Raytheon quickly became an innovator in the electronics industry. During World War II Raytheon supplied 80% of the magnetron tubes used in U.S. and British radars. The company was also a major contributor to the Allied forces for radar defense. Raytheon also created the first missile mounted guidance system and continuous wave radar capable of intercepting moving objects called Lark Missiles.
Raytheon is a global leader in command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance systems. As of Dec. 15, 2015 Raytheon employed approximately 61,000 employees across 80 countries.
In May 2015, the company acquired Websense Inc. (WBSN, Financial) from Vista Equity Partners for approximately $1.9 billion, net of cash received and exclusive of retention payments. Websense is a leader in advanced threat protection and data theft prevention across web, email, cloud and endpoint infrastructure. Since Raytheon acquired Websense, net sales have increased $224 million from $104 million in 2014, a good sign for increasing revenues in the future.
Raytheon has a market cap of $37.35 billion, an enterprise value of $39.68 billion, a P/E ratio of 18.38 and a dividend yield of 0.40.
The company has one risk factor that is worth mentioning. The majority of the company’s business relies on U.S. government sales. In 2015, approximately 68% of Raytheon's sales came from revenues generated from the U.S. government. Raytheon's future success is dependent upon its ability to innovate and execute new creative offerings and technologies to build and maintain clients.
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