5 National Defense Stocks for 2010
December 9, 2009
http://navelliergrowth.investorplace.com/stocks/defense-stocks-obama-nobel-peace-prize.html
5 “PEACEKEEPING” STOCKS TO BUY UNDER OBAMA’S WATCH
President Obama is traveling to Norway to accept the Nobel Peace Prize tomorrow. Even though the U.S. leader is about to receive a commendation to peace, Obama is a wartime president. In fact, less than 10 days ago, the Commander-in-Chief announced that he would escalate the war in Afghanistan by sending in 30,000 more American troops.
Nobel Laureate or not, it’s becoming clearer by the day that President Obama intends to aggressively safeguard the peace process in the New Year.
Politics aside, it’s going to take a lot of bullets, tanks, missiles, communication equipment and digital technology to help his administration achieve that end. As investors, we should see this as an opportunity to make money in 2010.
From stocks that train foreign security forces to companies that ward off digital and biohazardous threats, the business of peacekeeping is booming right now. Here are my top five stocks cashing in on this trend.
NATIONAL DEFENSE STOCK #1: GENCORP (GY)
For over half a century, GenCorp’s (GY) aerospace and defense company and primary subsidiary, Aerojet-General, has been an industry leader and pioneer in the development of critical propulsion system technologies that have strengthened the U.S. military and facilitated the exploration of space. The company’s propulsion products are used in missiles, maneuvering systems, launch vehicles, spacecraft and satellites.
Its major customers include the U.S. Department of Defense, NASA, Boeing, Lockheed Martin and Raytheon. Aerojet is the only domestic supplier of all four propulsion types—namely solid, liquid, air-breathing and electric. The company’s systems have flown on manned and unmanned missions for NASA since the start of the U.S. Space Program, and it has served as the DoD’s primary supplier of propulsion products. I rate this stock “Strong Buy.”
NATIONAL DEFENSE STOCK #2: SOURCEFIRE (FIRE)
Sourcefire (FIRE) is an IT firm that develops network security and information management software. The company's innovative 3D software (for discover, determine, and defend) is the gold standard for government agencies and large enterprises in the finance, health care, manufacturing and technology industries. Its customers have included PricewaterhouseCoopers, SAIC and Ernst & Young. The company also has partnerships with larger security service providers such as Symantec and VeriSign, allowing it to tap into bigger revenue streams.
In the third quarter, Sourcefire's sales rose 35% to $27.4 million compared with $20.3 million in the same quarter a year ago. The stock is a great buy for 2010 as cyber security remains a top priority for businesses and the government.
NATIONAL DEFENSE STOCK #3: ELBIT SYSTEMS (ESLT)
Israel's Elbit Systems (ESLT) is the driving force behind the military of this Middle Eastern country. ESLT supplies defense electronics for military operations on land, water and air. The company's contracts include work on such iconic war machines as the F-15 and F-16 fighters, the Comanche helicopter and the Bradley Fighting Vehicle. Its products also include helmet-mounted vision systems, weapon navigation systems and unmanned airborne vehicles
Israel and the U.S. account for more than one-third of the company's sales. And with Iran making a fuss over its pursuit of nuclear weapons, it stands to reason that Israel will be ramping up its military spending in response. That makes ESLT a great buy right now.
NATIONAL DEFENSE STOCK #4: ARCSIGHT (ARST)
Modern threats have to come from a gun or a bomb—digital security is increasingly important as hackers and computer viruses continue to get more aggressive in the 21st century.
That's what makes ArcSight (ARST) such a great buy right now. This software company helps protect businesses through digital security and virus safeguards. ArcSight counts Cisco Systems, IBM and McAfee among its strategic partners in digital security—showing that this is no bargain-basement software program. Those Fortune 500 companies wouldn't leave their network security to just anyone.
ArcSight is an industry leader in digital security and a great buy right now.
NATIONAL DEFENSE STOCK #5: PRECISION CASTPARTS (PCP)
Precision Castparts (PCP) is a small metal fabrication company with a significant military and aerospace component. The company is still not very well-known outside of national security circles. Nevertheless, Precision Castparts has been an amazing stock.
http://navelliergrowth.investorplace.com/stocks/defense-stocks-obama-nobel-peace-prize.html
