Lockheed Martin Corporation (NYSE:LMT) is the largest defense company in the world. And while chaos seems to be on the upswing around the world, LMT stock just had a very tough quarter. The stock is off 24% in the last three months. the stock was more or less treading water in 2018, until the selloff started.

But that is only half the story. The fact is, LMT was chugging along at about a 20% annual growth clip for the last three years until September of 2018, not including its currently 3.3% dividend.

Since then, it has suffered the same fate as the broad market.

The Setup for LMT Stock

However, while the secular selloff has hit Lockheed Martin, it isn’t because there’s a problem specifically with LMT. As a matter of fact, defense stocks should be some of the best long-term growth stocks you can own.

To this point, LMT announced its Q3 earnings in late October and not only came in above expectations for the quarter, but also guided to the high end of its earnings projections for the year.

And then it also guided higher than analysts for 2019. Now, LMT isn’t a naïve small firm hoping to sweet talk analysts with good numbers. It is conservatively run mega-corporation in a very serious business. But all this bullish news equated to … a selloff when the stock opened.

Perhaps there was some concern that arms sales to Saudi Arabia and the Middle East would be affected by the Saudis’ murder of journalist Jamal Khashoggi. Perhaps its concern over a slowing global economy. Regardless, these tensions are also the reason that arms sales grow. Political tensions and weakening political stature are more reasons to beef up the military rather than hamstring it.

In the U.S., we have economic and diplomatic issues with China — a trade war, China’s growing aggressive presence in the South China Sea — Iran’s growing power in the Middle East as the U.S. leaves Syria and Afghanistan and Russia’s increasingly destabilizing efforts against NATO, just to name a few.

All this adds up to a growing global tensions, especially the kind of low-grade tensions that aid in selling and incorporating new defense weapons and weapons systems.

For example, with the rise of Chinese economic and military power, Japan is now looking to bolster its defense forces for the first time since WWII. It just put in an order for $10 billion worth of Lockheed Martin F-35s. And that will be just the beginning.

There’s no doubt that defense stocks have been on a healthy run since President Donald Trump took office. And even now, LMT is trading at a P/E of 24, which is fairly rich for this sector.

But Lockheed Martin has the most deep-pocketed, reliable clients on the planet. And in these chaotic times, LMT stock is a safe port in the storm that’s trading a discount.

Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, 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.