Company Description: Raytheon Company, the world’s sixth largest military contractor, specializes in making high-tech missiles, advanced radar systems and sensors, defense electronics, and missile-defense systems.
Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:
1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number
RTN is trading at a premium to all four valuations above. Since RTN’s tangible book value is not meaningful, a Graham number can not be calculated. The stock is trading at a 48.9% premium to its calculated fair value of $67.68. RTN did not earn any Stars in this section.