Industry Week in Review – May 10, 2019

KippsDeSanto & Co. Industry Week in Review – May 10, 2019

 Aerospace & Defense Update

This week, President Trump nominated acting Secretary of Defense, Patrick Shanahan, as the next Secretary of Defense.  Before he was selected by Trump to serve as James Mattis’ deputy Secretary of Defense, he worked in the private sector at Boeing for more than 30 years in a variety of roles.  As deputy Secretary of Defense, the second-highest civilian position, Shanahan was responsible for day-to-day operations and implementing military initiatives, such as executing President Trump’s plan of increasing the size of the U.S. military.  Shanahan became Acting Secretary of Defense after Mattis resigned, thereby assuming all major roles and responsibilities of the position.  If confirmed by the Senate,  Shanahan intends to aggressively implement the National Defense Strategy and remain committed to air, land, and sea military modernization efforts.

Following Iran’s announcement that the country may restart parts of its nuclear program, The United States imposed significant sanctions against Iran’s industrial-metals sector, targeting the country’s iron, steel, aluminum, and copper industries, which directly affect more than $5 billion of Iran’s non-oil exports.   Iran recently stated it would relinquish limits on stockpiling nuclear materials if European countries supported its struggling economy as tensions with the U.S. continue to rise.  However, if key European countries such as France, the United Kingdom, and Germany refuse to help Iran circumvent U.S. sanction, Iran threatened to escalate its nuclear programs, including re-opening its plutonium reactor complex and increasing production of enriched uranium.  These countries have not signaled their respective decisions yet, but Iran’s threats create a difficult decision as these countries now need to choose between maintaining their critical alliance with U.S. and upholding their historic nuclear pact with Iran.

Big Mover(s)

 Booz Allen Hamilton Co. (Up 2.2%) – Share prices were up this week as Booz Allen Hamilton announced several large investors, including Oppenheimer & Co., Mercer Global Advisors, Inc., and Boston Advisors LLC, all grew their positions in shares of the Company in the 1Q19.

 Vectrus, Inc. (Down 9.6%) – Share prices were down this week following the Company announcement that despite increasing earnings 15% year-over-year, the Company still missed earnings estimates by $0.13, or 17.3%.

 Transactions

AirBoss of America Corporation has agreed to acquire Critical Solutions International, Inc., a provider of testing, development, and production of various mine-detection vehicles and systems to the United States Army. Terms of the deal were not disclosed.

CLM Equity Partners acquired Zircon Precision Products, Inc., a provider of precision aerospace machining business supporting both commercial and military applications. Terms of the deal were not disclosed.

Envistacom, LLC has acquired, Fast Fit Technologies, LLC, a provider of open-source communication waveform and data analytics virtualization.  Terms of the deal were not disclosed.

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