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Defense Sector Update March 13-19: Billions Of Reasons To Like Defense

The big news out of this week as it relates to contracts belongs to Boeing, which we will discuss below. Other than that, there wasn’t much movement compared to last week.

  • Lockheed Martin (LMT): $18,563,989,151
  • Boeing (BA): $11,247,579,796
  • Raytheon (RTN): $4,783,680,270
  • General Dynamics (GD): $2,118,848,571
  • BAE Systems (OTCPK:BAESY): $1,802,608,836
  • Huntington Ingalls (HII): $1,744,736,117
  • Northrop Grumman (NOC): $1,229,790,548
  • United Technologies (UTX): $985,246,756

Significant Contracts

Boeing snagged a $3.4 billion contract for 268 Apache attack helicopters. According to the press release, the US Army will get 244 remanufactured Apaches and an unnamed international customer will receive 24 brand new “E” variants. According to the DoD contract releases the international customer is Saudi Arabia, which is a huge customer of US made weapons. Even without a main-effort production fighter jet Boeing is finding ways to keep the lights on at their defense segment.

(Source: Military.com)

Lockheed got another $40 million to continue the F-22’s sustainment. This supports my theory that investors need not worry about the F-35. Even if the F-35 is delayed or gets bad press, the DoD still has to shell money out to Lockheed to keep the F-22 in the air. The situation becomes even more dire since China has just set their J-20 loose, a jet that boasts the same capability as the F-22.

Weekly Performance

A great week for the sector, every company we track beat the S&P 500, Northrop just barely making it thanks to a strong Friday.

LMT Price data by YCharts

BAE Systems has been having a nice run lately. I still feel strongly that the multi-national posture the company enjoys will benefit them for the next several years. For those who are unaware, BAE Systems is a UK based defense contractor that enjoys domestic treatment here in the US. Basically this means they have access to everything that a truly domestic firm like Lockheed. Being based in the UK, they also stand to profit…

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