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Lock and Load Up on Alliant Tech

Cramer’s found more investment ideas on the front page of the New York Times than he ever did on the business pages, he said. Just take a look at the paper of record today: “Supplier Under Scrutiny on Aging Arms for Afghan.” Turns out some 22-year-old’s company won an almost $300 million contract to supply ammunition to Afghani forces fighting the Taliban and al-Qaeda – and that ammunition was more than 40 years old.

This should push the U.S. government back to dealing with tried and true firms like Alliant Tech, Cramer said. Not to mention, we now know there’s a good chance troop levels will stay the same through 2008, so soldiers will continue to need fresh supplies, possibly from ATK.

Ammunition makes up 35% of the company’s sales, but Alliant also makes mission and launch systems. Business has been good: Last quarter, earnings per share were 6 cents ahead of estimates, while revenue growth clocked in at 17%. And the trend should continue with the early January addition of MacDonald Dettwiler and its global space business, a kind of one-stop shop for NASA complete with top-secret robotics, ground systems and radar.

The fundamentals are here, too. The stock’s cheap, the buyback’s big, and now there’s a potential catalyst. It might be time to lock and load up on ATK.

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