11 Undervalued Aerospace Stocks To Buy According to Hedge Funds

4. General Dynamics Corporation (NYSE:GD)

Forward Price to Earnings Ratio: 17.73

Number of Hedge Fund Holders: 48

General Dynamics Corporation (NYSE:GD) is a leading global aerospace and defense company, operating through its Aerospace, Marine Systems, Combat Systems, and Technologies segments. With a YTD return of over 5%, GD is one of the best aerospace stocks on our list.

During its recent Q3 earnings call on October 23, the company reported a $1.1 billion, or 10.4%, increase in revenue from last year to $11.67 billion. The surge was driven by strong performances by its Aerospace and Marine Systems segments, which grew 20% and 22%, year over year, respectively.

The Aerospace segment, which produces Gulfstream business jets, generated $2.48 billion in revenue during the quarter. Operating margin stood at 12.3%, around one percentage point lower than last year. The growth in segment revenue was attributed to higher service center and special missions volume and higher FBO and MRO volume, especially in the Asia Pacific region at Jet Aviation.

The Marine Systems segment posted revenue of $3.6 billion, up by $597 million from last year, with the Columbia-class shipbuilding and Virginia-class volume fueling growth. Sales figures for Combat Systems remain relatively flat, but the company is witnessing strong demand in the segment, with its backlog of orders now at $18 billion.

Ongoing conflicts in the Middle East and Ukraine, coupled with Washington’s quest to replenish inventories, have increased demand for weapons and other military equipment. With no immediate end to the wars in sight, General Dynamics Corporation (NYSE:GD) is projected to continue making gains.

Wall Street analysts have a consensus Buy rating for the stock and anticipate a share price upside potential of nearly 20%. As per Insider Monkey’s database for Q3 2024, 48 hedge funds held a stake in the company. GD is one of the best undervalued aerospace stocks to buy according to hedge funds.