Business is literally booming for the “defense” industry.
Led by Lockheed Martin Corp. (LMT), the biggest U.S. defense companies are trading at record prices as shareholders reap rewards from escalating military conflicts around the world.
Investors see rising sales for makers of missiles, drones and other weapons as the U.S. hits Islamic State fighters in Syria and Iraq, said Jack Ablin, chief investment officer at Chicago-based BMO Private Bank. President Barack Obama approved open-ended airstrikes this month while ruling out ground combat.
[...]
For defense companies, the offensive against Islamic State and al-Qaeda extremists is more than a showcase for big-ticket weapons such as Lockheed’s F-22 Raptor fighter, the stealth jet that debuted in combat this week.
In its first night of airstrikes into Syria, the U.S. dropped about 200 munitions and launched 47 Raytheon-made Tomahawk cruise missiles, according to U.S. Central Command. The military also deployed Boeing’s GBU-32 Joint Direct Attack Munitions and Hellfire missiles from Bethesda, Maryland-based Lockheed, creating an opening for restocking U.S. arsenals.
[...]
“As we ramp up our military muscle in the Mideast, there’s a sense that demand for military equipment and weaponry will likely rise,” said Ablin, who oversees $66 billion including Northrop Grumman Corp. (NOC) and Boeing Co. (BA) shares. “To the extent we can shift away from relying on troops and rely more heavily on equipment -- that could present an opportunity.”
Bloomberg
Always great opportunities for business in wars.
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