08-19-2019, 08:58 PM
(08-19-2019, 01:26 PM)fenders53 Wrote: Any current thoughts on LMT? It's on my list and waiting for a small pullback to initiate a position. I own no defense contractors outside of mutuals and ETFs.
I'd highly recommend picking up a defense contractor or two. The current geopolitical climate is one where they have done well and should continue doing well for the foreseeable future. If you look at their book to bill ratios, you'll see that most (at least the ones I'm looking at) are above 1.00 so the demand is certainly there. Most of them have had a nice run up these past few years but the P/E ratios aren't sky high, dividends can be quite low though.
It's always a challenge to pick the right one but I'd say any of the large players should be a decent investment going forward, there is a lot of cooperation between them too on the larger projects so while your company might not be picked as the main contractor for a certain project, they will still probably see some revenue streams from it.
My guess for the hot stuff of the next few years in the sector: communications, electronic warfare, cyber security, hypersonics, optics&sensors, anything space related (mainly commercial side) and of course classified.