Precision Castparts: A Five-Star Stock That's Prepared to Pop


By Brian D. Pacampara, The Motley Fool

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, aircraft components maker Precision Castparts (PCP) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Precision's business and see what CAPS investors are saying about the stock right now.

Precision facts

Headquarters (Founded)

Portland, Ore. (1949)

Market Cap

$21.2 billion


Aerospace and defense

Trailing-12-Month Revenue

$6.01 billion


Chairman/CEO Mark Donegan

CFO Shawn Hagel

Return on Equity (Average, Past 3 Years)



$822.8 million / $236.9 million


Alcoa (AA)

Allegheny Technologies (ATI)

Carpenter Technology (CRS)

On CAPS, 98% of the 1,300 members who have rated Precision believe the stock will outperform the S&P 500 going forward. These bulls include Kenjotto and Vermilian.

Last year, kenjotto touched on the tailwinds working in Precision's favor: "As business picks up, more and more people will be flying, which will require more and more spare aircraft parts. Also, as fleets age and new models come on line (get with it, [Boeing]!) [Precision] will be a supplier of choice for machined components."

Sponsored Links

Precision even boasts a robust three-year average operating margin of 24.5%. That's easily higher than that of rivals Alcoa (2.9%), Allegheny (8%), and Carpenter (5.5%).

CAPS member Vermilian expands on the outperform argument:

As we come out of the recession the business jet industry will begin to heat up. This is a very cyclical industry that has fallen on hard times. Precision Castparts makes metal fasteners and cast parts for the aircraft industry. Look to companies like [Precision] to benefit as companies like Textron (TXT) (owner of Cessna Aircraft) get back on track. Other companies like Boeing (BA) will be big customers of [Precision] as the dreamliner comes on board. Boeing also won a rather large military contract for tankers from the U.S. government.

What do you think about Precision, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Precision Castparts is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

More from The Motley Fool

Get info on stocks mentioned in this article: