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.
Written in the first person by Warren Buffett and Charlie Munger, relying on the Q2 2026 Form 10-Q (period ended June 30, 2026), recent earnings disclosures, and current market data. Northrop Grumman is a company we admire and a stock we decline to buy. It builds things almost nobody else on Earth can build — stealth bombers, intercontinental ballistic missiles, exquisite radars — behind regulatory walls so high that no new competitor will ever scale them. The backlog just hit a record $104.7 billion, book-to-bill in the June quarter was 1.84, and management is honest, rational, and shareholder-minded. And yet. The castle has the widest moat in American industry, but the king who lives next door sets the toll. Northrop's sole meaningful customer — the U.S.
Recent filings analysed: 10-Q (2026-07-21), 8-K (2026-05-21), 10-Q (2026-04-21), 8-K (2026-04-21).
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