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military stocks

Top 3 Military, Space & Aircraft Stocks

industrials Oct 19, 2021

This week was absolutely huge for the military, space, and aircraft sectors. During this past week there were two major conferences. The first was the U.S. Army's annual meeting and the second was the National Business Aviation Association's (NBAA) conference in Las Vegas. Both of these two conferences are annual events that cannot be missed by investors who are actively watching the space.

From the early conversations we had with attendees, corporations and others, the general gist is that 2021 was a record year across aeronautics, travel, and defense. Within each sub-sector, revenue growth was huge and there was hard positive spikes from 2020.

Within travel specifically, we saw demand spiking in aircraft purchases (across retail, corporate & government). And within the defense space, we saw that the US Army has and will continue to expand spending on their military presence in the Pacific Ocean. 

But while increased spending is good for the sector, only a handful of those companies will be direct beneficiaries of these huge budgets. So who are they?

Let's get into it below 👇

 

Top 3 Stocks:

1) Spirit AeroSystems (SPR)

 

Spirit AeroSystems is a new position for us. A stock we've always had our eye on, the conference brought on a new confidence in the name and therefore we bumped it up as one of our top plays in the sector. 

If you don't know about Spirit they are the company who helps build several important pieces of the Boeing aircraft, including the fuselage of the 737, portions of the 787 fuselage, and the cockpit section of the fuselage of nearly all of its airliners.

While the fallout from the 737 MAX hurt their business, news from the conference is that demand is starting to pick back up across their products. Additionally business travel seems to be rebounding nicely, thus creating more demand for corporate travel. While investing in Boeing is a way to play it, Spirit is even better as they create parts for multiple airplane manufacturers!

We're assigning them a price target of $53 which represents 25% upside from today's price!

 

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