Sundstrand: Set For Liftoff?

Crimped military spending has kept aerospace stocks from flying high. But that's just dandy for some daring investors, who have been snapping up Sundstrand (SNS), a maker of aircraft and aerospace components. The shares, trading in the mid-50s last summer, are down to 45, in part because of disappointing earnings.

Even so, the stock has been inching higher of late, notes one technical analyst. It appears to be "on the verge of breaking out," he says.

That's probably due to heavy buying by some big players, including investment manager John Levin, who has accumulated 5.2%. Others who own large Sundstrand stakes include Oppenheimer Capital, with more than 9% of the stock; Capital Research & Management, with 7.7%; and RCM Capital Management, with 5%.

"Levin wants Sundstrand to look for ways to maximize the value of its stock," says Charlie LaLoggia, editor of the Special Situation Report in Rochester, N.Y. Levin believes the assets are worth considerably more than the current price of the stock, says LaLoggia, who pegs Sundstrand's value at 55 or more in a takeover. Levin's position appears to put Sundstrand "in play," and that's probably why the stock's trading pattern is starting to turn very bullish, adds LaLoggia.

Sundstrand could spin off some assets or merge with a larger company. Sundstrand and Levin declined comment.

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