2015 All-America Research Team: Aerospace & Defense Electronics, No. 3: Robert Stallard

At No. 3 on this list isRobert Stallard, who rises from runner-up to post his best showing since 2007. The RBC Capital Markets analyst, 42, reports on 31 aerospace and defense companies. Among his favorites in that group is diversified defense supplier General Dynamics Corp., which provides cybersecurity services and weapons systems to government agencies and manufactures Gulfstream jets, tanks and war ships. Stallard began the year with a more cautious outlook on the Falls Church, Virginia–based giant, lowering his rating from outperform to market perform, at $133.76, primarily because he saw cheaper opportunities among competitors. In March, however, with the share price little changed but lagging the sector by 7.5 percentage points, he boosted his stance to outperform. General Dynamics was undervalued within the group, he contended. Despite weaker global demand for its business jets, Stallard anticipated positive quarterly results and noted that management intended to return all free cash flow to investors via dividends and share repurchases. Sure enough, in July the company reported better-than-expected earnings per share for the second quarter, at $2.27, marking a 20.7 percent year-over-year increase. Revenue also beat consensus forecasts, rising 5.5 percent, to $7.9 billion, with growth across all business units. By the middle of last month, General Dynamics’ stock had risen 4 percent, to $139.24, while U.S. aero and defense names fell 7.8 percent. “Rob casts a wide net and truly understands what drives stock returns,” one portfolio manager remarks.