Remember when Lockheed Martin $LMT announced their intent to acquire Aerojet Rocketdyne $AJRD and the FTC sued to block the deal? Ever wonder why Lockheed was willing to pay a 25% premium for the company? We'll let's take a quick look at this little rocket company.

The primary business of $AJRD is rocket propulsion systems. In terms of competition in this field, it is quite dense.

However, $AJRD is the only systems maker to service and build all 4 types of propulsion systems.

In terms of where their revenue comes from it's basically all government contracts. However, it is pretty diversified across various departments.

$AJRD has a fairly linear growth path providing propulsion systems not only for defense-based rockets but also for space exploration rockets in the future.

As for why Lockheed Martin wanted to acquire the company the explanation is somewhat obvious. They already have several large contracts with the company to build the propulsion/engine systems for Lockheeds rockets.

The initial announcement of $LMTS intent to acquire caused $AJRDS stock to jump 25%.

Unfortunately given the fact that $AJRD is the last independent missile propulsion provider the FTC sued to block the deal.

This caused the stock to drop about 18% and overall the company has fallen ~25% from its post-deal-announcement highs.

While Lockheed won't be able to own it I have been looking at it for quite a while. Just look at the consistency of sales growth and the EBITDAP Margin growth.

Unfortunately, Cash Flow seems to be a problem, and probably worth diving a little deeper to see what's going on there.

Overall I think $AJRD is a fairly overlooked company producing steady returns for shareholders by consistently growing sales and winning contracts from both the US Government and other Government Contractors.