8.08k followers • 18 symbols Watchlist by Motif Investing
The Department of Defense’s priorities for the next five years call for protected and prioritized investments in weapon technology and new capabilities.
Curated by Motif Investing
The US Department of Defense has its marching orders: maintain the capability and capacity to deal with contingencies across the globe while “Making Every Defense Dollar Count”. A key to achieving both objectives is a shift toward evolutionary technology in weapons. Unmanned drones can put eyes in the sky around the world, which will help mitigate the near 100,000-troop reduction planned by 2017. Advanced fighter planes like the F-22 Raptor and the Joint Strike Fighter represent the next generation of air superiority. Plus, smart bombs provide long-range precision strike capabilities.
While growth in military spending is likely to decline, spending on advanced weapons systems could continue to increase.
We identified US-listed stocks and American Depository Receipts of companies that are engaged in activities relevant to this watchlist's theme. We then filtered out companies that have a share price of less than .00 or a market capitalization less than 00 million, and excluded illiquid stocks by screening companies for liquidity i.e. average bid-ask spreads, dollar volume traded etc. Finally the proprietary Motif Optimization Engine determined the constituent stocks. Learn more about how we select our watchlists.Who made these selections?
Motif is an online brokerage built on thematic portfolios of up to 30 stocks and ETFs. Founded in 2010 by Hardeep Walia, Motif combines complex proprietary algorithms with skilled advisers to develop these thematic portfolios. Learn more about our team.How are these weighted?
First, we determined each company's percentage of total revenue derived from this watchlist's theme. Second, we applied a pure-play factor to give greater relative weight to companies that derive a higher percentage of their revenue from this theme. Finally, we weighted each company by its market capitalization adjusted for revenue exposure to the theme.
More details on how we build and weight watchlists are available here.
|Watchlist||Change today||1-month return||1-year return||Total return|
|Symbol||Company name||Last price||Change||% change||Market time||Volume||Avg vol (3-month)||Market cap|
|LMT||Lockheed Martin Corporation||393.38||+4.96||+1.28%||10:00 am GMT-4||168.95k||1.23M||109.97B|
|NOC||Northrop Grumman Corporation||337.32||+4.52||+1.36%||10:00 am GMT-4||21.75k||806.31k||56.24B|
|GD||General Dynamics Corporation||140.86||+1.41||+1.01%||10:00 am GMT-4||87.46k||1.20M||40.42B|
|RTN||Raytheon Company||116.96||-||-||4:02 pm GMT-4||9.36M||9.36M||32.57B|
|BAH||Booz Allen Hamilton Holding Corporation||87.46||+0.08||+0.09%||10:01 am GMT-4||69.66k||910.16k||12.05B|
|HII||Huntington Ingalls Industries, Inc.||143.875||+0.26||+0.18%||10:00 am GMT-4||35.21k||400.15k||5.83B|
|ESLT||Elbit Systems Ltd.||121.88||-2.32||-1.87%||10:00 am GMT-4||11.96k||22.88k||5.46B|
|OSK||Oshkosh Corporation||73.669||+1.06||+1.46%||10:01 am GMT-4||21.88k||387.73k||5.02B|
|FLIR||FLIR Systems, Inc.||35.38||+0.41||+1.17%||10:01 am GMT-4||62.82k||1.51M||4.64B|
|SAIC||Science Applications International Corporation||78.8||+0.46||+0.59%||10:01 am GMT-4||14.55k||697.39k||4.58B|
|MRCY||Mercury Systems, Inc.||77.5||+0.71||+0.92%||10:01 am GMT-4||22.88k||441.75k||4.34B|
|AJRD||Aerojet Rocketdyne Holdings, Inc.||42||-1.11||-2.57%||10:00 am GMT-4||65.36k||630.71k||3.30B|
|MANT||ManTech International Corporation||71.69||+0.28||+0.39%||10:00 am GMT-4||4.73k||203.30k||2.89B|
|CUB||Cubic Corporation||58.525||+3.80||+6.93%||9:59 am GMT-4||175.73k||538.74k||1.83B|
|AVAV||AeroVironment, Inc.||63.28||+0.16||+0.25%||10:00 am GMT-4||13.97k||202.99k||1.53B|
|NPK||National Presto Industries, Inc.||83.54||+0.16||+0.19%||9:30 am GMT-4||195||27.72k||586.57M|
|OA||-||-||-||-||6:07 pm GMT-4||-||-||-|
|DGI||-||-||-||-||6:07 pm GMT-4||-||-||-|
(Bloomberg Opinion) -- The landmark peace deal between Israel, the United Arab Emirates and Bahrain is great news in terms of constructing a regional coalition against Iran. It may also help convince the Palestinians that they are no longer at the center of Arab politics, and bring them to the negotiating table. It perhaps gives the administration of President Donald Trump a minor talking point that won’t really matter to most Americans.But the most complex and controversial aspect is that the deal may create the conditions for massive U.S. arms sales — including fifth-generation fighter aircraft — to Arab nations, beginning with the UAE. While Trump said he has “no problem” selling the advanced planes to an Arab nation, it raises legitimate concerns for Israel’s security.Let’s start with the importance of the F-35 Lightning, also known as the Joint Strike Fighter. It is the dominant combat aircraft in the world today, bar none. (Disclosure: I have consulted in the past for Northrop Grumman, one of the subcontractors.) It has a highly stealthy profile, advanced human-machine interfaces and powerful command-and-control features that integrate it into broader combat networks.Israel is one of the key international partners in the program; it received its first F-35s in 2016 and plans to purchase 50 or more.The problem with providing the F-35 and associated combat systems to Arab states, at least with all their technological capabilities, is that it might erode Israel’s “qualitative military edge,” or QME — an assurance from the U.S. that it will not sell its most advanced weapons to Israel’s potential military opponents.There is precedent going back to the Camp David accords in the 1970s of giving advanced military technology to Arab states — Israel’s then-enemies Jordan and Egypt. Opponents of any new sale in Congress and Israel, however, correctly point to U.S. law on the matter, which guarantees that Washington will not allow the QME to be weakened. The Emiratis, whose interests in Washington are skillfully represented by Ambassador Yusef Al Otaibi, say that a new deal would be exactly that — a new arrangement for a new era. They point out that unlike Egypt and Jordan, they have never attacked Israel. What are the biggest considerations in deciding whether any sale should go forward?First, the U.S. must look at how the technology that would be shared in an F-35 sale would be protected. When I was supreme allied commander of the North Atlantic Treaty Organization, we were negotiating F-35 sales to the European allies, and the first conversation was always about security issues.These included physical protection of hangars and airfields, and of any manufacturing conducted in a foreign country; the guidelines under which the maintenance process would be conducted; what cybersecurity barriers would be in place; and the reliability of the security-clearance process for all those in possession of the technology (from commanders to pilots to wrench-turning jet mechanics).A second factor in the U.S. decision is the regional geopolitics. The UAE has been a reliable contributor to U.S. and allied operations. Its forces played roles in the Balkans, Somalia, Afghanistan, Libya and against the Islamic State. As NATO commander, I was deeply impressed by the Emiratis’ military professionalism, especially during the Libyan campaign. My counterpart at U.S. Central Command (and future defense secretary), General Jim Mattis, called the UAE “little Sparta.” While Washington has broadly opposed the UAE’s participation in the Saudi-led military campaign against rebels in Yemen, the overall alignment between the nations is high.Providing the Emiratis with advanced weaponry would not only strengthen the alliance against Iran, it would help avoid arms-sales competition from Russia and China. A cautionary example is the purchase by Turkey, a NATO partner, of the S-400 anti-aircraft missile system from Russia, which will probably cost the Turks their participation in the F-35 program. A third element is the so-called “under the table” relationship existing between UAE and Israel for more than a decade. As head of U.S. European Command, which includes the military relationship with Israel, I saw firsthand the nascent cooperation between the Israelis and the Sunni Arab states in Special Forces, air defense, cybersecurity and long-range surveillance. The F-35 deal, should it come to fruition, would seem to be a logical extension of that cooperation.It could also be a magnet that eventually pulls Saudi Arabia into similar peace arrangements with Israel, and into high-tech arms deals with the U.S. This would have even more geopolitical advantage for Washington than the UAE deal.Finally, the views in Israel must be considered. Domestic politics there are always fractious, and the coalition government does not seem fully aligned over bringing the UAE into the F-35 program. The sale probably has the blessing of Prime Minister Benjamin Netanyahu — although he is denying it — but not of Defense Minister Benny Gantz, who under the complicated power-sharing agreement is slated to become prime minister late next year.If all these political and foreign-policy considerations can be ironed out, the debate ultimately becomes a fairly technical military discussion. Would Israel possess “superior military means,” as the QME law stipulates, even after the F-35 becomes part of the Emiratis’ inventory? The answer depends on the precise configuration of the F-35 that is sold to the UAE (there are several variations, and it’s possible to sell a version without all its advanced technology); the capabilities of Israeli’s air defenses (first rate now, and not entirely dependent on U.S. equipment); and the degree to which Israel and the UAE can set up integrated air-surveillance and communication systems.I participated in these sorts of technical discussions at the Pentagon on several occasions. They can get emotional, and take months or even years. Conversations we had for several years with Brazil about technology transfer and sharing with the F-18 Hornet ultimately failed, and the Brazilians ultimately purchased Gripen fighters from Sweden. Yet the Trump administration seems motivated to declare victory on the deal before the November election.This circled can be squared, but maintaining the QME will require the U.S. to increase its support to Israel more broadly. This can be done first by allowing accelerated procurement under the current Memorandum of Understanding — a 10-year agreement with the Israelis on aiding their overall security — which would bring not only the F-35 but also new F-15X fighters and KC-46 refueling tankers.The U.S. could also increase the quantity and lethality of precision-guided munitions in the War Reserve Stocks, a cache of weaponry maintained by the U.S. inside Israel for use in an emergency.Washington could increase the intelligence flow to Israel (already high, but not quite at the level of the Five Eyes program of English-speaking nations) and conduct more technology sharing in cybersecurity; cyberwarfare can provide enemies strong counters to new kinetic technology like the F-35. Finally, as the Israelis normalize relations with increasing numbers of their neighbors, Washington may want to sign a formal mutual defense treaty with Tel Aviv. Given the rising threat of Iran, the U.S. would be smart to improve the UAE’s defenses. But protecting commitments with Israel takes priority. It will be a complicated process, one that can’t be rushed to meet the exigencies of the U.S. electoral calendar.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.James Stavridis is a Bloomberg Opinion columnist. He is a retired U.S. Navy admiral and former supreme allied commander of NATO, and dean emeritus of the Fletcher School of Law and Diplomacy at Tufts University. He is also an operating executive consultant at the Carlyle Group and chairs the board of counselors at McLarty Associates.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The new campus in Hampton, Virginia will support unmanned systems prototyping, production and testing.NEWPORT NEWS, Va., Sept. 22, 2020 (GLOBE NEWSWIRE) -- Huntington Ingalls Industries (NYSE: HII) announced today that it broke ground on a new Unmanned Systems Center of Excellence in Hampton. Two buildings totaling over 150,000 square feet will be constructed on the 20-acre campus and will be purpose-built for unmanned systems prototyping, production and testing. “With U.S. Navy’s increasing demand for UUVs and USVs, we are committed to investing in and expanding our unmanned systems capabilities,” said Andy Green, HII executive vice president and president of Technical Solutions. “Our new Unmanned Systems Center of Excellence will ensure we can continue to provide our customers with the most advanced autonomous systems across all class sizes.”The HII Unmanned Systems Center of Excellence, located on the Hampton Roads Center – North Campus, will be a state-of-the-art facility with a high-tech digital manufacturing infrastructure. This agile space will be reconfigurable for different production and systems integration projects and have precision machining capabilities, a surface finishing area and a dedicated welding space.Photos accompanying this release are available at: https://newsroom.huntingtoningalls.com/releases/unmanned-systems-center-of-excellence.“Virginia is proud to be home to the largest military shipbuilder in the country,” said Gov. Ralph Northam. “Huntington Ingalls Industries is a national leader in advanced manufacturing, and this investment is a powerful testament to Virginia’s workers and business environment. The company’s new unmanned systems facility in Hampton will support America’s national security and play a key role in strengthening our economic recovery as we continue working to rebound from this health crisis.”HII partnered with the Virginia Economic Development Partnership, the city of Hampton and the Hampton Roads Alliance to secure the project for Virginia. More than 250 jobs will be created and will enable collaboration with HII’s Newport News Shipbuilding division, which has advanced undersea system engineering capabilities.“The new campus complements our current facilities in Massachusetts, Florida and Washington that have been delivering marine robotics to the Navy for nearly 20 years,” said Duane Fotheringham, president of Technical Solutions’ Unmanned Systems business group. “In order to manufacture and support large and extra-large UUVs, the size of the manufacturing operation needs to increase significantly. This new facility will give us the space and infrastructure we need to scale our operations to meet the needs of our customers now and into the future.”The groundbreaking ceremony was also attended by Virginia Secretary of Commerce and Trade Brian Ball; Hampton Mayor Donnie R. Tuck; Hampton Economic Development Director Chuck Rigney Sr., and Rob Brown, president of Robert Brown & Associates.The first 22,000-square-foot building will be completed by the end of this year. The main 135,000 square-foot-facility is planned to be completed in the fourth quarter of 2021.Huntington Ingalls Industries is America’s largest military shipbuilding company and a provider of professional services to partners in government and industry. For more than a century, HII’s Newport News and Ingalls shipbuilding divisions in Virginia and Mississippi have built more ships in more ship classes than any other U.S. naval shipbuilder. HII’s Technical Solutions division supports national security missions around the globe with unmanned systems, defense and federal solutions, and nuclear and environmental services. Headquartered in Newport News, Virginia, HII employs more than 42,000 people operating both domestically and internationally. For more information, visit: * HII on the web: www.huntingtoningalls.com * HII on Facebook: www.facebook.com/HuntingtonIngallsIndustries * HII on Twitter: twitter.com/hiindustries * HII on YouTube: www.youtube.com/huntingtoningalls * HII on Instagram: www.instagram.com/huntingtoningalls Statements in this release, as well as other statements we may make from time to time, other than statements of historical fact, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed in these statements. Factors that may cause such differences include: changes in government and customer priorities and requirements (including government budgetary constraints, shifts in defense spending, and changes in customer short-range and long-range plans); our ability to estimate our future contract costs and perform our contracts effectively; changes in procurement processes and government regulations and our ability to comply with such requirements; our ability to deliver our products and services at an affordable life cycle cost and compete within our markets; natural and environmental disasters and political instability; our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures, and strategic acquisitions; adverse economic conditions in the United States and globally; changes in key estimates and assumptions regarding our pension and retiree health care costs; security threats, including cyber security threats, and related disruptions; and other risk factors discussed in our filings with the U.S. Securities and Exchange Commission. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make.Contact: Beci Brenton Beci.Brenton@hii-co.com (202) 264-7143
Shares of Kratos Defense and Security Solutions (NASDAQ: KTOS) traded down nearly 10% on Tuesday after the defense company was downgraded by J.P. Morgan. Kratos, which specializes in drones and defense electronics, got a lift back in late July when online news service Dealreporter suggested it as a potential acquisition target for Lockheed Martin (NYSE: LMT). The shares were up 21% over the past three months coming into Tuesday trading, making Kratos one of the top-performing defense stocks of the summer.