During time of war it seems that Aerospace and Defense stocks perform reasonably well.

Are we at war?  

Some say we are and some say we aren’t yet.  I’d say with the killing of Gen. Qasem Soleimani, recently — if we are not at war with Iran, we could be soon.  Instead of pulling our troops out of the Middle East, which President Trump announced he was doing a month or so ago, he has recently sent another 3,500 troops to the middle east after the recent killing of this terrible Iranian General.

I pulled a list of stocks that were showing price increases today (01/06/2020), while the market was down, using my Vectorvest Software and in pulling this list I asked specifically for stocks that were trending higher today on price … had an RT (relative timing) of 1.0 or higher, an RS (relative safety) of 1.0 or higher and a RV (relative value) of 1.0 or higher.  It is important to remember that these three vectors from Vectorvest are based on a rating scale of 0 to 2 with 1 or higher being good and anything below 1 not being so good.

Relative Timing (RT) means that the stock for the short term is trending up (above 1.0) or down (below 1.0).  Relative Safety means the stock has good or bad fundamentals (1.0 or higher is good and below 1.0 is not so good).  Relative Value means the stock is trading at a good price to valuation.

There are two other measures you will see in this table below:  VST is a Value, Safety, Timing vector (again on a scale of 0 to 2) and CI is the comfort index meaning the price is relatively stable and the price chart would show a general rise of price from the lower left of the chart to the upper right of the chart over the past one year and one quarter.  CI is also rated on a scale of 0 to 2.  You will notice that all the stocks in this table have a VST rating above 1.0 and a CI rating of above 1.0.

Based on how Vectorvest values stocks you will notice also (looking at the value – price column) that 4 of these 8 stocks are currently overvalued and 4 are undervalued.  Notice also that 7 of these stocks fall within the Aerospace and Defense sector while one falls in the Telecommunications Sector.  We will discuss this one stock later.  For now, take a look at the list:

Hopefully, if you click on the picture above you will be able to see a larger table.  For now let’s talk a little about what each of these companies does in case you don’t know.

NOC – Northrop Grumman

HII – Huntington Ingalls

TDY– Teledyne Technologies

AJRD – Aerojet Rocketdyne Holdings

GD – General Dynamics

CAE – CAE Inc.

ESLT – Elbit Systems

LHX – L3Harris Technologies

This is the IBD stock of the day.

L3Harris is the result of last year’s merger between Harris Corp. and L3 Technologies. The firm is expected to come up with $18 billion in annualized revenues when its integration is complete.

The company makes battlefield communications systems, night-vision devices, sensors and satellite communications. It also makes a computer processor for Lockheed Martin‘s (LMT) F-35 stealth fighter.

Defense stocks overall had a strong 2019 as the Trump administration looks to invest heavily in new U.S. capabilities while the expanding Pentagon budget enjoys rare bipartisan support in Congress.

You can click here and get the Vectorvest Analysis summary of this particular stock.  I think you may also understand why Vectorvest places it in the Telecommunications Sector rather than the aerospace and defense sector as well … even though a lot of what they do is in the aerospace and defense sector.

The bottom line:

If you are looking to add some stocks to your portfolio in the near future … you may want to consider one or two of the ones mentioned in this report.  One of my favorites, Boeing (BA) did not make the list.  Because of it’s problems with the 737 passenger jet being grounded due to a few crashes it has trended down in price since about February 2019.  However, with a current price of $322.06 Vectorvest says it is valued at $364.17 – so it is underpriced now.  If you are feeling a little “contrarian” this may be a good one to take a look at – though they are not out of trouble yet.

Though it’s RV is 1.17 and it’s RS is 1.15 – the RT (relative timing) is only 0.94 as I write this and the CI (comfort index) is only 0.51.  It would not be comfortable watching this one over the next few months … but it could pay off long-term.  It did hit a high of $440.62 back on February 25, 2019 and could get back to that price with a little good news coming it’s way.

Here’s a list of all 44 stocks found in the Vectorvest software ranked from Highest VST to Lowest VST if you want to do some of your own research.

Again click on the graphic to see a larger copy.

Finally, if you prefer not to do your own research, call your financial advisor and ask for his or her help.  Do not call me as I am not licensed to give financial advice.  The only purpose of this article is to provide some education as a starting point for you to come to your own decision or a decision with the assistance of a competent financial advisor.

Also do not pay any attention to the Buy, Hold, or Sell recommendations in the table.  These recommendations can change on a daily basis since a lot of “day traders” use this service.

Thank you and let me know if you have some questions I can answer for you.

Until next time … go make a few waves,

Jerry Nix | FreeWaveMaker, LLC