Entries by Rama Bondada

    Research in Action: Why Defense Stocks May Still Help Growth and Value Investors

    May 15, 2014 8:58 AM by Rama Bondada

    Do defense stocks still work when the world's biggest consumer of military products, services, and technology is cutting back? The answer may surprise you.


    Don't let declining defense spending fool you. Defense stocks still have the potential to advance.

    Among my top picks are a Fortune 100 company that is leading a $220 billion program with nine other countries to develop fighters that can perform ground attacks, reconnaissance, and air-defense missions with stealth capability; a diversified technology and innovation leader that is seeing increased demand for stronger missile-defense systems from U.S. allies; and a top Pentagon supplier that he likes more for its very popular and very profitable line of business jets. (See "Quality Stocks in Three Flavors.")

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    Research in Action: Changing Flights on Aerospace Stocks

    May 9, 2014 12:32 PM by Rama Bondada

    Now that some of the world's leading aircraft manufacturers have had quite a run over the last two years, certain aftermarket companies appear more attractive.  

    For an aerospace and defense analyst, there's nothing like watching mega cap stocks jump 80%. That's what two leading aerospace companies did over the last two years, thanks to sharply higher demand from emerging markets; a healthier airline industry; and dramatic improvements in lightweight composite materials, fuel efficiency, and avionics.

    While the order backlog for major aerospace companies remains strong, the two biggest manufacturers have held the rate of production flat to give the rest of the supply chain a chance to catch up. As a result, I’ve shifted my focus to aftermarket companies that supply a wide variety of high-margin products that remain very much in demand. 

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