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Orbital ATK Wins DoD Contract Worth $20M for Ammunitions

Orbital ATK Inc. OA, a leading aerospace and defense company, has clinched a five-year Indefinite Delivery Indefinite Quantity (“IDIQ”) contract from the U.S. Department of Defense (“DoD”) to supply non-U.S. standard ammunition (“NSA”) and mortar weapons systems to international allies.

We remind investors that Orbital ATK has been the primary supplier for the NSA program since it was initiated in 2008, having provided as many as 600 million units of NSA products to U.S. allies. Earlier, the company had won an NSA contract worth $300 million for a period of three years, which expired in Dec 2015. The latest contract, on the other hand, came with an initial award of $20 million.

In light of rising threats to national security due to growing terrorism, governments and military bodies have shifted focus toward higher investments in creating and maintaining an inventory of advanced warfare artillery. This should, in turn, boost the demand for ammunitions worldwide.

Orbital ATK has a significant presence in the defense and commercial aerospace markets. The company’s Defense Systems segment is a pioneer of innovative and affordable precision and strike weapons, advanced propulsion and hypersonic, electronic warfare systems, ammunition and related energetic products.

Following in the footsteps of other defense majors, Orbital ATK is increasingly focusing on strategies such as product developments, long-term contracts and business expansion to strengthen its position in the global ammunition market.

Orbital ATK’s diverse product line enables it to win big-ticket contracts at regular intervals from its customers. The company remains optimistic about its performance in 2016 backed by a robust backlog of $13.5 billion at 2015 end.

Zacks Rank & Key Picks

Orbital ATK currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the aerospace and defense industry include Rockwell Collins Inc. COL, Spirit AeroSystems Holdings, Inc. SPR and HEICO Corporation HEI. While Spirit AeroSystems Holdings sports a Zacks Rank #1 (Strong Buy), both Rockwell Collins and HEICO Corporation carry a Zacks Rank #2 (Buy).

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ROCKWELL COLLIN (COL): Free Stock Analysis Report
 
SPIRIT AEROSYS (SPR): Free Stock Analysis Report
 
HEICO CORP (HEI): Free Stock Analysis Report
 
ORBITAL ATK INC (OA): Free Stock Analysis Report
 
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