2 Defense Stocks Moving Higher (LMT and GD)

I work for LM and I am here to say that it is a VERY inefficiently run company. At times, I believe that the Government runs more efficiently. The amount of management layers and pork spending (yes, this can absolutely exisit within a company) siphons the cash that so many projects could use. You wouldn't believe the kind of money we spend on non-value added stuff. The infighting between business units alone easily costs tens of millions. I was personally involved in an infighting episode that lasted 5 months and cost the company a couple hundred K. I can't believe that I am the only one in a company with 140,000 employees. They recently promoted a guy to VP who stole some business from my business unit, then called my director and admitted he lied when he did it. As an insider, I would never invest in a company as corrupt and inefficient as this one. Cheers to those of you who do.

Longterminv,

I have no doubt in what you said but I look at the charts and the technicals of the company speaks volume in itself. If it starts breaking here, heck, I just get out of its way but right now it looks that the move is in UP direction.

Lets catch that move and make some moooooolah !!!

sti,
http://stock-trading-ideas.com

When it comes to making money, I am as ruthless as the next investor, but trading in weapons manufactures.. that's a tough one... this means i should jump for joy every time a war breaks out... erghh..

A very interesting take in the WSJ this morning that may explain the LMT move beyond just the technicals. In the past couple of years military procurement has trended toward how to fight a terror war...a war of insrugents and low intensity conflict. The breakout by Russia in Georgia once again shows that Eastern Europe is a flash point. We are the heart and soul of NATO and NATO will now get increasingly involved in the satelite countires of the former Soviet Union. The companies that make the big ticket items ( BA, RTN, GD, LMT, NOC, TXT) are going to be involved in this. See the quote from the WSJ piece below:
"When Russia's invading forces choked roads into Georgia with columns of armored vehicles and struck targets from the air, it instantly bolstered the case being made by some that the Defense Department isn't taking the threat from Russia and China seriously enough. If the conflict in Georgia continues and intensifies, it could make it easier for defense companies to ensure the long-term funding of their big-ticket items."

No matter what the news is, it will definitely show up on the charts in the form of price-volume action. WSJ reported today but the stocks have been acting good for few days.

Yep, LM is an arms dealer. When a small conflict erupts (like Georgia) or could erupt (like Taiwan/China) that requires the systems we make, then the Government generally requests that we make more of them. An actual campaign-sized engagement (like Iraq) is generally bad because the money that Government would normally spend on new equipment gets spent on fixing old equipment and other operations costs, such as fuel. LM does not have very good exposure to the repair and maint. side of things, so we don't make much money in those envrinoments. The relative weighting of small conflicts, threats, and large engagements ends up having a lot to do with the company's future. But make no mistake, LM is an arms dealer.

LMT and GD showing some positive signs of breakout...I hope they don't get chopped this time around.

sti,
http://stock-trading-ideas.com

Someof the more diversified defense contractors/industrials have been beaten down well here too. I like AME, UTX, and even TXT at this level though there is rumor that TXT's bell helicopter contract is at risk. For more generic government plays look at SAI and CAI - both IT services/management firms.

Best to all.

I have been looking high and low for the "rumor" above on TXT and their Bell division. This is some recent news..."FORT WORTH, TEXAS (March 28, 2008) -- Bell Helicopter, a Textron Inc. (NYSE: TXT) company, announced today that the U.S. Department of Defense has awarded a $10.4 billion, five-year Multi-Year Procurement contract for 167 V-22 Osprey tiltrotor aircraft to a strategic alliance between Bell Helicopter and The Boeing Company."

I am not finding anything bad. What specifically is this rumor? Contract for what and with whom?