American defense stocks are experiencing one of their best days in months today!
US President Donald Trump announced today that the state defense budget will be increased from 1 trillion USD to 1.5 trillion USD per year. The increase is therefore considerable.
Shares in the defense industry are responding with strong gains, led by $LMT, $RTX and $NOC.
Stock prices after the market opened, for example at Northrop Grumman $NOC, rose by as much as 10%. They were thus within reach of a new all-time high. By evening, however, the excitement and the gains had slightly subsided.
In Europe, the defense industry is also still a very "hot" topic. Shares of Rheinmetall $RHM.DE climbed by 1.98% today and are trading just below the 1,900 EUR mark.
We even have a local representative.
Company Czechoslovak Group, which is owned by Czech billionaire Michal Strnad, could be heading to the stock market. It is now being reported that the owner may have released up to 15% of his shares into circulation. The IPO is planned on the Amsterdam exchange.
According to recent estimates, the company could be valued at 820 billion to 1.2 trillion korunas (35-50 billion EUR).
Are you invested in this sector?
The defense sector makes sense to me long-term, but personally I would only go with LMT. Lockheed has the most stable cash flow, key programs, and the strongest direct link to the US budget. Other companies are interesting, but are often more cyclical or riskier from a project standpoint. If you're going to hold anything in this sector, for me it would be $LMT.
I have an ETF 🙂 $DFNS.MI and so far I'm satisfied. I'll see what this year brings.