Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for businesses that can raise prices, earn high returns on capital without heavy reinvestment, and compound value for decades without asking shareholders for anything. Huntington Ingalls is the opposite of that animal, dressed up in a costume that fools a lot of people. It is America's largest military shipbuilder, the only company on Earth that can build a nuclear-powered aircraft carrier, and one of only two that can build a nuclear submarine for the U.S. Navy. That sounds like the widest moat imaginable — and as a barrier to entry, it is. But a moat is only worth something if the castle inside it earns attractive returns, and here the castle has exactly one customer, and that customer writes the contracts, sets the margins, audits the books, and owns most of the upside.
Recent filings analysed: 8-K (2026-07-30), 10-Q (2026-07-30), 8-K (2026-05-05), 10-Q (2026-05-05).
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