Overweight We have been overweight the pure-play BCA defense index since late-2015 and our strategy is to add exposure on any meaningful pullbacks and keep this index as a structural overweight within the GICS1 S&P industrials…
Highlights Portfolio Strategy Debt saddled small caps have to wrestle with rising interest rates at a time when they lack a valuation cushion. Tack on their high beta status and investors should continue to avoid small caps and…
Overweight On Monday of this week, President Trump signed the John S. McCain National Defense Authorization Act into law. Most significantly, the bill authorizes $717 billion in defense funding for FY2019, a small increase from the $…
Overweight Defense stocks have been range-bound in the last week as geopolitical maneuvering has seen probabilities of conflict on the Korean peninsula swinging wildly back and forth. Using this conflict to value defense equities seems…
Overweight Defense stocks were battered this week as, despite earnings exceeding expectations and both guidance and forecasts moving higher, the market sold off. It appears a softer tone from President Trump with respect to North Korean…
Overweight S&P defense shares have been enjoying a terrific streak over the past three years, solidly outperforming the S&P 500 in each of them. This is in no small part because of new orders, which have been steadily…
Overweight The U.S. defense complex has seen a solid recovery in orders over the last three years (second panel), a notable feat because of the absence of a major conflict driving domestic orders. In fact in the past decade, domestic…
Overweight The Stockholm International Peace Research Institute (SIPRI) released data earlier this week showing that global arms sales (as measured by the revenues of the largest 100 defense companies) had arrested their 6-year long…
Underweight For most of this decade, U.S. airline pricing power and the price of jet fuel have moved in lockstep (second panel) i.e.: airlines have been able to pass through their primary input cost. However, this relationship has…