Profitable Growth for Narrow-Moat Babcock as Defence Outsourcing Continues; Shares Undervalued
We are initiating coverage on Babcock with a fair value estimate of GBX 1040 per share, and we believe the current share price does not fully reflect the firm’s profitability growth potential. Babcock is one of the largest suppliers to the U.K. Ministry of Defence. Based on long-term agreements, the firm offers maintenance and retrofit of warships and nuclear-powered submarines to the Royal Navy and provides fleet management for the British Army. The MoD is Babcock's largest customer (42% of sal...Babcock International Group is a holding company. Through its subsidiaries, Co. operates in four sectors: Marine, which provides an array of marine and naval engineering services; Land, which provides fleet management and training for customer-owned defense, emergency services, global airport and commercial vehicle fleets, as well as engineering services and technical training for customers worldwide; Aviation, which delivers an array of engineering services to defense and civil customers; and Cavendish Nuclear, which delivers nuclear engineering on nuclear decommissioning programs and projects across the U.K., as well as nuclear engineering services in training and operation support.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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