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Defense Stock Roundup: Lockheed, Boeing Score Big Wins
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The recent altercation between President Trump and North Korean leader Kim Jong-un sent the major defense stocks rallying. Notably, Trump cautioned North Korea that if it does not refrain from repeated missiles threats, the U.S. will respond with “fire and fury.”
In retaliation, Kim threatened to fire missiles on Guam, a U.S. territory in the Pacific that houses military bases. While the rest of the broader market reacted negatively to the escalated geopolitical tensions, defense stocks picked up pace.
But it is imperative to mention that this tension between the U.S. and North Korea has not been the only driving force behind the defense stocks’ rally. In fact, the space has been a big market winner for quite some time now, on the back of Trump’s presidential win and a few other factors.
However, major indices for the Aerospace sector ended up in the red in the trailing five trading sessions. While the S&P 500 Aerospace & Defense (Industry) Index lost 0.8%, the Dow Jones U.S. Aerospace & Defense Index declined 0.9% during this period. Nevertheless, a generous flow of funds from the Pentagon continued to boost the sector.
Among last week’s highlights, defense majors like Lockheed Martin Corp. (LMT - Free Report) , Boeing Co. (BA - Free Report) , General Dynamics Corp. (GD - Free Report) and Raytheon Co. secured a number of orders from the Department of Defense’s (“DoD”) daily funding session.
1. Lockheed Martin’s Missiles and Fire Control business unit has won a contract for the Special Operations Forces Global Logistics Support Services (SOF GLSS) requirement. The deal has been awarded by the U.S. Special Operations Command Contracting office, Tampa, FL.
The $8 billion contract will enable Lockheed Martin to offer non-personal, global logistics support services along with the expertise to maintain program support. Also, it will help to maintain Enterprise management functions for the Program Executive Office of the Special Operations Forces Support Activity.
Work related to this deal will be carried out in Bluegrass Station, Lexington, KY, Bluegrass Army Depot, Richmond, KY, Fort Walton Beach, FL and Crestview, FL as well as multiple customer locations both inside and outside the continental U.S. Fiscal 2017 operations and maintenance funds will be utilized to finance the work. (Read more: Lockheed Martin's MFC Unit Wins $8 Billion SOF GLSS Contract)
Again, the company announced that it is one of the six companies to receive the Aerospace Systems Air Platform Technology Research program contract from the U.S. Air Force. The contract has a ceiling value of $499 million. Lockheed Martin is the third company to receive this deal from Pentagon.
Per the contract, the company will be responsible for providing quality research for affordable, revolutionary capabilities for the warfighter. Also, it expects to complete the task by 2025. The work will be carried out at the company’s Fort Worth, TX, facility. (Read more: Lockheed Martin Wins $499M Contract from U.S. Air Force)
2. Boeing has clinched a modification contract to support sustainment of C-17 aircraft owing to increase in fleet and number operating bases. Valued at $7.1 billion, the contract has been awarded by the Air Force Life Cycle Management Center, C-17 Contracting Branch, Robins Air Force Base, GA.
3. Javelin, a joint venture formed by defense majors Raytheon and Lockheed Martin, won a modification contract for procuring Javelin containerized all-up rounds, command launch units, Javelin vehicle launcher-electronics and associated non-recurring engineering. Work related to the deal is scheduled to be over by Aug 31, 2020.
Valued at $133.9 million, the contract has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL. Moreover, the deal falls under the foreign military sales program of the United States and will aid nations like Jordan, Qatar and Taiwan. (Read more: Raytheon-Lockheed Martin JV Wins $134M Army Deal for Javelin)
4. General Dynamics’ business division, Electric Boat, secured a modification contract to offer additional lead-yard services, development studies and design efforts in support of the Virginia-class submarines. Work related to this deal is scheduled to be over by October 2017.
Valued at $115.3 million, this contract has been awarded by the Naval Sea Systems Command, Washington, D.C. While majority of the work will be carried out in Groton, CN, the rest will be performed in Newport and Quonset Point, RI.
Per the modification, Electric Boat will provide lead-yard services for the nuclear submarines. This, in turn, will sustain, update and support the Virginia-class design and associated drawings as well as data for each submarine, along with technology insertion throughout its construction and post-shakedown availability period.
Meanwhile, Electric Boat will continue development studies and design efforts associated with components and systems to complete research and development tasks and prototypes, and engineering development models essential to fully assess new technologies to be inserted in succeeding Virginia-class submarines. (Read more: General Dynamics Wins $115M Virginia-class Submarine Deal)
Currently, General Dynamics carries a Zacks Rank #3.
5. Raytheon’s unit, Missile Systems, won a contract for Griffin Missiles worth $104.9 million. The deal include delivery of all variants of Griffin standoff precision guided munitions and related production, test and engineering support.
The agreement has been awarded by Air Force Life Cycle Management Center, Eglin Air Force Base, FL, and is expected to be completed by Dec 31, 2018. The work will be carried out in Tucson, AZ.
Raytheon currently carries a Zacks Rank #4 (Sell).
Performance
The major defense stocks recorded mixed performance for the last five trading sessions. While Rockwell Collins Inc. , Raytheon and Lockheed Martin gained 3.26%, 1.94% and 1.49% respectively, other defense giants like Boeing, General Dynamics, Textron Inc. (TXT - Free Report) and L3 Technologies, Inc. lost more than 0.5% in the same time frame.
In fact, all the industry majors delivered a stellar performance except Textron in the last six months. Notably, Boeing gained the most with its stock rallying 36.41%, followed by Rockwell Collins.
The following table shows the price movement of the major defense players over the past five trading days and the last six months.
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Defense Stock Roundup: Lockheed, Boeing Score Big Wins
The recent altercation between President Trump and North Korean leader Kim Jong-un sent the major defense stocks rallying. Notably, Trump cautioned North Korea that if it does not refrain from repeated missiles threats, the U.S. will respond with “fire and fury.”
In retaliation, Kim threatened to fire missiles on Guam, a U.S. territory in the Pacific that houses military bases. While the rest of the broader market reacted negatively to the escalated geopolitical tensions, defense stocks picked up pace.
But it is imperative to mention that this tension between the U.S. and North Korea has not been the only driving force behind the defense stocks’ rally. In fact, the space has been a big market winner for quite some time now, on the back of Trump’s presidential win and a few other factors.
However, major indices for the Aerospace sector ended up in the red in the trailing five trading sessions. While the S&P 500 Aerospace & Defense (Industry) Index lost 0.8%, the Dow Jones U.S. Aerospace & Defense Index declined 0.9% during this period. Nevertheless, a generous flow of funds from the Pentagon continued to boost the sector.
Among last week’s highlights, defense majors like Lockheed Martin Corp. (LMT - Free Report) , Boeing Co. (BA - Free Report) , General Dynamics Corp. (GD - Free Report) and Raytheon Co. secured a number of orders from the Department of Defense’s (“DoD”) daily funding session.
(Read: Defense Stock Roundup for Aug 9, 2017 here)
Recap of the Week’s Most Important Stories
1. Lockheed Martin’s Missiles and Fire Control business unit has won a contract for the Special Operations Forces Global Logistics Support Services (SOF GLSS) requirement. The deal has been awarded by the U.S. Special Operations Command Contracting office, Tampa, FL.
The $8 billion contract will enable Lockheed Martin to offer non-personal, global logistics support services along with the expertise to maintain program support. Also, it will help to maintain Enterprise management functions for the Program Executive Office of the Special Operations Forces Support Activity.
Work related to this deal will be carried out in Bluegrass Station, Lexington, KY, Bluegrass Army Depot, Richmond, KY, Fort Walton Beach, FL and Crestview, FL as well as multiple customer locations both inside and outside the continental U.S. Fiscal 2017 operations and maintenance funds will be utilized to finance the work. (Read more: Lockheed Martin's MFC Unit Wins $8 Billion SOF GLSS Contract)
Again, the company announced that it is one of the six companies to receive the Aerospace Systems Air Platform Technology Research program contract from the U.S. Air Force. The contract has a ceiling value of $499 million. Lockheed Martin is the third company to receive this deal from Pentagon.
Per the contract, the company will be responsible for providing quality research for affordable, revolutionary capabilities for the warfighter. Also, it expects to complete the task by 2025. The work will be carried out at the company’s Fort Worth, TX, facility. (Read more: Lockheed Martin Wins $499M Contract from U.S. Air Force)
Lockheed Martin currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2. Boeing has clinched a modification contract to support sustainment of C-17 aircraft owing to increase in fleet and number operating bases. Valued at $7.1 billion, the contract has been awarded by the Air Force Life Cycle Management Center, C-17 Contracting Branch, Robins Air Force Base, GA.
Work related to this deal is scheduled to be over by Sep 30, 2021 and will be carried out across the globe. (Read more: Boeing Secures $7.1B Air Force Deal for C-17 Support)
Boeing currently carries a Zacks Rank #3.
3. Javelin, a joint venture formed by defense majors Raytheon and Lockheed Martin, won a modification contract for procuring Javelin containerized all-up rounds, command launch units, Javelin vehicle launcher-electronics and associated non-recurring engineering. Work related to the deal is scheduled to be over by Aug 31, 2020.
Valued at $133.9 million, the contract has been awarded by the U.S. Army Contracting Command, Redstone Arsenal, AL. Moreover, the deal falls under the foreign military sales program of the United States and will aid nations like Jordan, Qatar and Taiwan. (Read more: Raytheon-Lockheed Martin JV Wins $134M Army Deal for Javelin)
4. General Dynamics’ business division, Electric Boat, secured a modification contract to offer additional lead-yard services, development studies and design efforts in support of the Virginia-class submarines. Work related to this deal is scheduled to be over by October 2017.
Valued at $115.3 million, this contract has been awarded by the Naval Sea Systems Command, Washington, D.C. While majority of the work will be carried out in Groton, CN, the rest will be performed in Newport and Quonset Point, RI.
Per the modification, Electric Boat will provide lead-yard services for the nuclear submarines. This, in turn, will sustain, update and support the Virginia-class design and associated drawings as well as data for each submarine, along with technology insertion throughout its construction and post-shakedown availability period.
Meanwhile, Electric Boat will continue development studies and design efforts associated with components and systems to complete research and development tasks and prototypes, and engineering development models essential to fully assess new technologies to be inserted in succeeding Virginia-class submarines. (Read more: General Dynamics Wins $115M Virginia-class Submarine Deal)
Currently, General Dynamics carries a Zacks Rank #3.
5. Raytheon’s unit, Missile Systems, won a contract for Griffin Missiles worth $104.9 million. The deal include delivery of all variants of Griffin standoff precision guided munitions and related production, test and engineering support.
The agreement has been awarded by Air Force Life Cycle Management Center, Eglin Air Force Base, FL, and is expected to be completed by Dec 31, 2018. The work will be carried out in Tucson, AZ.
Raytheon currently carries a Zacks Rank #4 (Sell).
Performance
The major defense stocks recorded mixed performance for the last five trading sessions. While Rockwell Collins Inc. , Raytheon and Lockheed Martin gained 3.26%, 1.94% and 1.49% respectively, other defense giants like Boeing, General Dynamics, Textron Inc. (TXT - Free Report) and L3 Technologies, Inc. lost more than 0.5% in the same time frame.
In fact, all the industry majors delivered a stellar performance except Textron in the last six months. Notably, Boeing gained the most with its stock rallying 36.41%, followed by Rockwell Collins.
The following table shows the price movement of the major defense players over the past five trading days and the last six months.
Aerospace - Defense Industry 5YR % Return
Aerospace - Defense Industry 5YR % Return
4 Surprising Tech Stocks to Keep an Eye On
Tech stocks have been a major force behind the market’s record highs, but picking the best ones to buy can be tough. There’s a simple way to invest in the success of the entire sector. Zacks has just released a Special Report revealing one thing tech companies literally cannot function without.
More importantly, it reveals 4 top stocks set to skyrocket on increasing demand for these devices. I encourage you to get the report now – before the next wave of innovations really takes off.
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