Postcards from the florida republic: An independent and profitable state of mind. You’ve got to hand it to the Keynesian economists. Every chance they get, they’ll spend money we don’t have and praise themselves for doing it. Last week, it was these White House economists writing a paper to celebrate record government spending. This week, […]Raytheon
Article Index
Uncle Sam Is Going to Hand Us a 13% Winner
Postcards from the florida republic: An independent and profitable state of mind. You’ve got to hand it to the Keynesian economists. Every chance they get, they’ll spend money we don’t have and praise themselves for doing it. Last week, it was these White House economists writing a paper to celebrate record government spending. This week, […]Raytheon Stock Price Up Today After New $1 Billion Cybersecurity Contract (NYSE: RTN)
The Raytheon stock price jumped 1.5% to $107.25 Tuesday morning after announcing it has a new $1 billion cybersecurity contact with the U.S. Department of Homeland Security.
Here's why the contract is such a big win for the Raytheon stock price.
Obama's Defense Cuts Mean More Mergers for Tech Investors
I can explain the impact of President Obama's new defense budget to investors in one word - mergers.
Indeed, the M&A field will remain a driving force in the defense sector for at least the next two years.
The good news for tech investors is that Obama's focus fits with the Pentagon's push for more high-tech breakthroughs.
We're talking about more drones instead of fighter jets and robots to replace troops for some tough jobs.
But don't gloss over information technology since it cuts through the entire supply chain.
Since World War II, the U.S. military has pursued high tech at a rapid pace.
However, that trend gained speed in recent years after the Pentagon rolled out the concept of making computers an even bigger part of our fighting forces.
You see, the top brass likes to call it "net-centric warfare." I know it sounds complex. But it really is very simple.
Here's the big idea: link every facet of defense to secure networks. Ideally, that means senior leaders could track every boat, bullet and bayonet on one computer screen.
Today, we're facing a new Cold War with China, while at the same time we are cutting spending and reducing troop strength.
Here's what it all means for investors...
At least once a month, the CEO of a company with great tech realizes he needs more financial muscle to survive the leaner times.
That usually means selling to a larger firm.
So look for defense companies that have access to financing or enough cash to go on shopping sprees.
Just last month, Lockheed Martin Corp. (NYSE: LMT), revealed it bought a firm that provides autopilot and other devices for small drones.
I believe this is a shrewd purchase. After all, the military is clearly moving toward more unmanned aerial vehicles.
These UAVs come in a wide range of sizes and applications.
At one end we have the Predator drone. It's about the size of a private jet and receives heavy use by the U.S. against Al Qaeda terrorists.
Now just shrink that down to the size of a large insect and you have the new generation of drones. In the very near future these types of drones will find wide use in surveillance missions.
A high-tech team at Wright-Patterson Air Force Base is working on micro drones that look like bugs. They fit in the palm of your hand and are designed to find the enemy in tight urban terrain.
Cyber-security will also remain an active area for the Defense Department and Homeland Security. While Obama's budget for 2013 cuts 100,000 troops, it does emphasize cyber-operations.
Consider that on December 29 Raytheon Co. (NYSE: RTN) said it is buying a small, privately held cyber-security firm. That was the second such merger in three weeks for Raytheon.
Those two Raytheon mergers occurred just weeks after the Pentagon said it reserves the right to respond to an attack on its computers with the use of force.
The field is attracting foreign interest as well. French giant EADS (EPA: EAD) says it wants in on the action and will buy firms to do so.
Though EADS hasn't said it will buy in the U.S., it's a good bet the company will at least look in America as it tries to balance out the sales of its jumbo jets.
On the other hand, not all the defense mergers will turn on high tech...
Indeed, the M&A field will remain a driving force in the defense sector for at least the next two years.
The good news for tech investors is that Obama's focus fits with the Pentagon's push for more high-tech breakthroughs.
We're talking about more drones instead of fighter jets and robots to replace troops for some tough jobs.
But don't gloss over information technology since it cuts through the entire supply chain.
Since World War II, the U.S. military has pursued high tech at a rapid pace.
However, that trend gained speed in recent years after the Pentagon rolled out the concept of making computers an even bigger part of our fighting forces.
You see, the top brass likes to call it "net-centric warfare." I know it sounds complex. But it really is very simple.
Here's the big idea: link every facet of defense to secure networks. Ideally, that means senior leaders could track every boat, bullet and bayonet on one computer screen.
Obama's Budget Cuts in a Modern World
And now, new budget cuts mean the military must do more with less.Today, we're facing a new Cold War with China, while at the same time we are cutting spending and reducing troop strength.
Here's what it all means for investors...
At least once a month, the CEO of a company with great tech realizes he needs more financial muscle to survive the leaner times.
That usually means selling to a larger firm.
So look for defense companies that have access to financing or enough cash to go on shopping sprees.
Just last month, Lockheed Martin Corp. (NYSE: LMT), revealed it bought a firm that provides autopilot and other devices for small drones.
I believe this is a shrewd purchase. After all, the military is clearly moving toward more unmanned aerial vehicles.
These UAVs come in a wide range of sizes and applications.
At one end we have the Predator drone. It's about the size of a private jet and receives heavy use by the U.S. against Al Qaeda terrorists.
Now just shrink that down to the size of a large insect and you have the new generation of drones. In the very near future these types of drones will find wide use in surveillance missions.
A high-tech team at Wright-Patterson Air Force Base is working on micro drones that look like bugs. They fit in the palm of your hand and are designed to find the enemy in tight urban terrain.
Cyber-security will also remain an active area for the Defense Department and Homeland Security. While Obama's budget for 2013 cuts 100,000 troops, it does emphasize cyber-operations.
Consider that on December 29 Raytheon Co. (NYSE: RTN) said it is buying a small, privately held cyber-security firm. That was the second such merger in three weeks for Raytheon.
Those two Raytheon mergers occurred just weeks after the Pentagon said it reserves the right to respond to an attack on its computers with the use of force.
The field is attracting foreign interest as well. French giant EADS (EPA: EAD) says it wants in on the action and will buy firms to do so.
Though EADS hasn't said it will buy in the U.S., it's a good bet the company will at least look in America as it tries to balance out the sales of its jumbo jets.
On the other hand, not all the defense mergers will turn on high tech...
To continue reading, please click here...
Stock-Market Survival Strategies: Why Raytheon is a "Must-Own" Profit Play
If you want some stock-market-survival advice, pull up a chair and spare us a couple of minutes.
From late April to mid-June, the Dow Jones Industrial Average plummeted more than 900 points. That 7% stock-market decline - which included a six-week losing streak - accelerated talks of a new bear market and a double-dip recession.
But just when it appeared the bottom was going to fall out of the U.S. stock market, the Dow did an about-face: It soared nearly 650 points in just five days and, like a vaudeville magician, seemed to make the bear-market worries disappear.
But don't be too trusting, says Money Morning's Keith Fitz-Gerald. In a market like this, stock-market survival is all about careful research, attention to detail and risk management.
"Like any investor or trader, I'll take a rally however it happens to come - and no matter why it comes," Fitz-Gerald said in an interview yesterday (Tuesday). "But I remain very concerned with what I see. It won't take much to spook this market."
From late April to mid-June, the Dow Jones Industrial Average plummeted more than 900 points. That 7% stock-market decline - which included a six-week losing streak - accelerated talks of a new bear market and a double-dip recession.
But just when it appeared the bottom was going to fall out of the U.S. stock market, the Dow did an about-face: It soared nearly 650 points in just five days and, like a vaudeville magician, seemed to make the bear-market worries disappear.
But don't be too trusting, says Money Morning's Keith Fitz-Gerald. In a market like this, stock-market survival is all about careful research, attention to detail and risk management.
"Like any investor or trader, I'll take a rally however it happens to come - and no matter why it comes," Fitz-Gerald said in an interview yesterday (Tuesday). "But I remain very concerned with what I see. It won't take much to spook this market."
Will Taiwan Arms Sale Ground Boeing?
Roughly $400 billion in revenue would be a heavy price to pay for selling 12 missiles to Taiwan, but that potentially is what The Boeing Co. (NYSE: BA) is facing as China continues to fume over U.S. arms sales to the renegade island.
The Obama administration last week approved a $6.4 billion weapons deal with Taiwan. The deal, which was brokered by the administration of George W. Bush in 2001, included UH-60 Black Hawk military helicopters and additional Patriot PAC-3 missile defenses, but not additional F-16 jets, which the government deemed "too provocative."
The sale infuriated China, which considers Taiwan its territory. Beijing has vowed to unify the region peacefully if possible and forcefully if necessary, but the 1979 Taiwan Relations Act obligates the United States to "provide Taiwan with arms of a defensive character." That makes Taiwan the most sensitive issue in bilateral relations between the two nations.