Lockheed Martin Corporation (NYSE:LMT) is the largest defense contractor in the world. Regardless what happened in the presidential election in November, LMT stock was set up for a great decade. And after Donald Trump won the election, it looked like Lockheed was on a glide path to profits. Until soon-to-be President Trump tweeted.
Trump tweeted that he thought the F-35, the state of the art fighter that could cost about $9 billion for about 90 planes, was too expensive. LMT dove after that. But it didn’t stay down long.
And it wasn’t actually the Trump shaming that brought the price down, it was the fact that the demand for F-35s has increased, which makes each one cheaper to produce. Now, they’re coming in at less than $100 million per plane.
As with everything, the more you make, the cheaper all your inputs get. And now, as countries in Europe — especially NATO countries — beef up their military budgets to get to agreed-upon levels, they’re looking to add F-35s to their arsenals.
But LMT is far more than the contractor for fighter jets.
LMT Stock Has the Future in Its Sights
It has its hands in every facet of military systems. For example, last year it acquired Sikorsky from United Technologies Corporation (NYSE:UTX). UTX was looking to get rid of divisions that were no longer part of its core growth strategy and Sikorsky was one of them.
Sikorsky practically invented the helicopter and has remained the industry’s leading developer for almost 80 years. And helicopters don’t get the press that high-end aircraft get, but they’re the workhorses of the military, ferrying people and equipment in and out of harm’s way on a daily basis. And anything that can get people and things from place to place safer and quicker is a very important piece of equipment.
If you combine that amount of institutional knowledge and reliability with Lockheed’s legendary Skunk Works team (its Advanced Development Program that has developed a majority of cutting edge aircraft in the U.S. armory), you get a very exciting merger.
One of the most exciting programs this team is developing is called ARES (Aerial Reconfigurable Embedded System). It’s basically a vertical take-off and landing (VTOL) platform that you can attach to any manner of objects. And it only takes up half the space of a conventional helicopter.
LMT also recently won a big contract from the Defense Advanced Research Projects Agency to begin building a hypersonic jet that will travel Mach 6 (six times the speed of sound). And this doesn’t even touch on its cybersecurity, C4ISR and aerospace work.
The point is, with a firm this size, its present is assured … it’s the future that you have to watch. And Lockheed has the future in its sights.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
