Defense Stocks: Three Companies Beefing Up Homeland Security
by Marc Lichtenfeld, Advisory Panelist
Wednesday, March 10, 2010: Issue #1213
There was a time when companies charged with defending the United States had to endure the changing political winds.
When hawkish Presidents occupied the White House, defense companies generally fared better than when the Commander-in-Chief was a dove.
Then 9/11 happened – and everything changed.
A New York Times article hammered that home last Saturday, with the story of how a suspected terrorist collaborator has achieved heroine status in Pakistan. What makes the fact that she’s considered a hero so shocking is that her actions go against the beliefs of many Pakistanis.
The last paragraph of the article contains a chilling quote from Pakistani columnist, Rafia Zakaria:
“Leaving a husband for a second marriage, traveling alone, even putting your children in harm’s way, all acts that would be otherwise reviled, became acceptable when they are done with the ultimate aim of defying the United States.”
When people hate others more than they love their children – and when others support that hate even when their values are compromised – the target of their hate has a serious problem.
I recently saw the toll that this hatred can take…
Defense Stocks: Investing In the Defense Sector’s Long-Term Growth
While I was waiting for a flight at a crowded gate in Washington D.C., a family of three sat down. One was an elderly woman. The other two were in their forties or fifties. They were dressed up. The younger woman was carrying a bible and an American flag folded in the shape of a triangle. They had just come from burying her son at Arlington National Cemetery.
He was an infantryman killed in Iraq. The woman alternated between airport business (making phone calls and checking on the flight) and staring vacantly, likely thinking about her boy.
My heart ached for her. I wanted to tell her how sorry I was for her loss, but I didn’t want to disturb what may have been a temporary moment of distraction. Although I’m not particularly religious, I silently said a prayer instead, asking for the rest of our men and women in uniform to be kept safe.
At that moment, my idea for this column gelled. At White Cap Research Group, we find companies with revolutionary technologies and bring them to you before anyone else does.
So I started researching companies with innovative, leading products that keep our soldiers and citizens safe. Here are three defense stocks…
- Esterline (NYSE: ESL) manufactures various defense and industrial products, such as radar counter-measure decoys for aircraft and other anti-missile and torpedo decoys. The stock trades just barely above its book value and at less than 14 times this year’s expected earnings of $3.35 per share.
- Force Protection (Nasdaq: FRPT) makes bulletproof and blast-resistant vehicles – essential for troops in both Iraq and Afghanistan. The company has loads of cash ($122 million), no debt and its earnings are expected to grow by 20% per year over the next five years.
- Global Defense Technology & Systems (Nasdaq: GTEC) provides counter-terrorism and intelligence data and analysis, as well as water purification and other support systems for deployed troops. Although it only trades in the low teens, GTEC is expected to earn $0.97 per share this year and $1.21 next year. Its projected annual five-year growth rate is 17.5%.
With the United States set to combat terrorism for years to come, it should provide long-term growth opportunities for the companies mentioned above.
Not only that, it’s my hope that their products, and others like them, enable more moms to carry light reading through our airports instead of folded flags.
To all our military personnel – past and present – thank you for your service.
Marc Lichtenfeld
Editor’s Note: Take a step into “White Cap” territory and see for yourself the kind of returns that can come from investing early in small, yet powerful firms with essential, innovative, in-demand products and a major edge over their peers.
Because Wall Street and the mainstream crowd often know little about these firms, early investors can clean up when these stocks blast onto the radar.
That’s the driving force behind The White Cap Report’s stock research – and it’s a methodology that has proved very successful, as this report shows.
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4 Responses to “Defense Stocks: Three Companies Beefing Up Homeland Security”
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Marc Lichtenfeld is embedded in the biotechnology and healthcare sectors. As Healthcare Specialist for The White Cap Research Group, his days are spent tracking the clinical trials of various companies seeking FDA approval on pharmaceuticals, which oftentimes means interacting with CEOs of companies.
March 10th, 2010 at 3:05 pm
Excellect, well written – good guidance too small defence stocks, appreciated
Reply
March 11th, 2010 at 3:27 am
I don’t agree with north americian policies.
Voting is totally useless. Allocating investments
is my interest for the wrongful injustice from
the courts(legislatively) and the corrupted system. The courts with their bible. Historically proves the violent models and who they are.
Hans Blix was right and terrorism is a Americian/
English behaviors out of control. Take my name of the email list. Investment U another idiot!
Reply
March 11th, 2010 at 12:55 pm
I didn’t understand your article. It went from hate to a grieving family burying their son. Did someone say something off color to them? Where’s the hate connection?
Reply
March 14th, 2010 at 12:07 pm
How about full disclosure in future articles
Reply