Defense contractors

[Xerxes]

Word on the street is that Larry Culp was trying to lobby Trump during the Middle East travels in order to get his GE engine on the F-35 as second option to P&W’ PW135. 
 

Poor Trump misunderstood that as a proposal for a twin-engine F-35, now being dubbed as F-55 being bounced around. 

[Spekulatius]

Well, if you sell engines a two engine plane is better for you than a one engine plane. Worth pitching to Trump .

 

The new big beautiful bill is great for defense stocks. I got to say, the 8% spending cut thy was bounced around earlier by Hegseth scared me a bit +15% sounds much better.

 

I sold my HII on thy China surge (don’t like the business, but the narrative setup was good). I only own RTX (reduce a bit) and Thales (only starter position) and think both are much closer to s sell than an buy here.

 

I have to say, that defense investing seems relatively easy - I bought 8 stocks or so over the last few years and have yet to incur a loser. No doubt a result of the environment since at least 2022 but also because narratives seem to move stocks around much more than they should in this rather resilient business.

[dealraker]

1 hour ago, Spekulatius said:

Well, if you sell engines a two engine plane is better for you than a one engine plane. Worth pitching to Trump .

 

The new big beautiful bill is great for defense stocks. I got to say, the 8% spending cut thy was bounced around earlier by Hegseth scared me a bit +15% sounds much better.

 

I sold my HII on thy China surge (don’t like the business, but the narrative setup was good). I only own RTX (reduce a bit) and Thales (only starter position) and think both are much closer to s sell than an buy here.

 

I have to say, that defense investing seems relatively easy - I bought 8 stocks or so over the last few years and have yet to incur a loser. No doubt a result of the environment since at least 2022 but also because narratives seem to move stocks around much more than they should in this rather resilient business.

I very much appreciate your defence related posts Ralf.  I have all the major names for decades in my taxable accounts, sold in ira all and only bought back LHX after the election sell.  The narratives and those voices as expected seem to be losing interest, self enrichment looks to be more their focus...again as expected.

[Spekulatius]

Looks like @lnofeisone was correct about $BAH. Big forecast miss and layoffs:

https://finance.yahoo.com/news/booz-allen-hamilton-holding-corporation-014216310.html

 

[Dalal.Holdings]

Anyone got any interesting Japanese defense co's/suppliers ?

[Spekulatius]

5 minutes ago, Dalal.Holdings said:

Anyone got any interesting Japanese defense co's/suppliers ?

There isn’t much available as they are mostly hidden within the keiretsus.

[Dalal.Holdings]

Even Subaru makes some military helicopters -- Subaru !

 

 

[Xerxes]

5 hours ago, Dalal.Holdings said:

Anyone got any interesting Japanese defense co's/suppliers ?

Mitsubishi and Kawasaki Heavies

 

have been rallying hard though

[Dalal.Holdings]

I think the German and Japanese defense ecosystems are set to undergo rapid change as the Post-WW2 framework ends

[lnofeisone]

On 5/24/2025 at 10:00 AM, Spekulatius said:

Looks like @lnofeisone was correct about $BAH. Big forecast miss and layoffs:

https://finance.yahoo.com/news/booz-allen-hamilton-holding-corporation-014216310.html

 

Thanks @Spekulatius. BAH is taking a beating in their Civilian and Health work. Their DOD work is holding up well and slowly growing. This is the same reason why the likes of CACI rebounded (though I think CACI will have different problems in 6-12 months). Depending on where the current administration decides to settle on things, BAH might be a good pick-up come mid-term elections. 

[anshulp]

$7721 and $7013 are neat. I think $4403 makes parts for rockets & missiles. 

On 5/24/2025 at 11:48 AM, Dalal.Holdings said:

Anyone got any interesting Japanese defense co's/suppliers ?

 

[Hektor]

https://www.wsj.com/world/america-let-its-military-industrial-might-wither-chinas-is-booming-7325f34b

 

America Let Its Military-Industrial Might Wither. China’s Is Booming.

[Hektor]

Also, China.

 

https://www.nytimes.com/2025/05/30/business/china-comac-c919-trump.html

 

Trump Has Targeted a Plane China Sees as a ‘Power’ Symbol

Beijing has high hopes for its C919 single-aisle jet after years of delay, but the plane depends on engines, avionics and other gear from Western companies.

 

In 2008, China established the state-owned Commercial Aircraft Corporation of China, or COMAC, with the goal of putting a single-aisle commercial jet into service by 2016.

 

Development of the plane has been slow. The company, which occupies a large expanse of newly built hangars and design studios in Shanghai, suffered delays despite extensive assistance from American and European companies. At least 40 percent of the C919 is made by companies in the United States and other countries in the West.

 

[Hektor]

https://www.wsj.com/business/trump-federal-contracts-tech-firms-c839fdbb
 

Trump Administration Targets Tech Firms as It Cuts More Contracts

Officials expand review of federal contractors beyond consulting firms

[Dalal.Holdings]

 

 

[Spekulatius]

21 minutes ago, Dalal.Holdings said:

 

 

This low tech attack works because Russia does not even have a rudimentary air defense system in place to defend their bases.

Something like this:

https://www.rheinmetall.com/en/products/air-defence/air-defence-systems/drone-defence-toolbox

[Dalal.Holdings]

3 hours ago, Spekulatius said:

This low tech attack works because Russia does not even have a rudimentary air defense system in place to defend their bases.

Something like this:

https://www.rheinmetall.com/en/products/air-defence/air-defence-systems/drone-defence-toolbox

 

What do you mean though? Russia has installed advanced Tire Anti-Drone System on its planes (albeit the # of tires has come down over the years):

 

[lnofeisone]

6 hours ago, Dalal.Holdings said:

 

What do you mean though? Russia has installed advanced Tire Anti-Drone System on its planes (albeit the # of tires has come down over the years):

 

Tires on the planes is an anti-missile tactic. It's very effective against missiles that rely on pattern matching. Never mind the cost/return of throwing a bunch of used tires on a plane. Drones are a different facet of an attack. 

[Dalal.Holdings]

1 hour ago, lnofeisone said:

Tires on the planes is an anti-missile tactic. It's very effective against missiles that rely on pattern matching. Never mind the cost/return of throwing a bunch of used tires on a plane. Drones are a different facet of an attack. 

 

 Not necessarily. The tires confuse machine vision/AI that is looking for "airplane" which can be used for drone targeting, especially in the final few meters

 

https://en.defence-ua.com/analysis/year_later_pentagon_explains_whats_the_point_of_aircraft_drawings_and_tire_coatings_at_russian_military_airfields-11877.html

 

It's still ridiculous and hilarious though

[lnofeisone]

14 minutes ago, Dalal.Holdings said:

 

 Not necessarily. The tires confuse machine vision/AI that is looking for "airplane" which can be used for drone targeting, especially in the final few meters

 

https://en.defence-ua.com/analysis/year_later_pentagon_explains_whats_the_point_of_aircraft_drawings_and_tire_coatings_at_russian_military_airfields-11877.html

 

It's still ridiculous and hilarious though

I'm not really sure what you are arguing. I said that tires are there for missile protection. Your article says exactly the same thing. 

[Dalal.Holdings]

On 6/2/2025 at 7:27 AM, Spekulatius said:

This low tech attack works because Russia does not even have a rudimentary air defense system in place to defend their bases.

Something like this:

https://www.rheinmetall.com/en/products/air-defence/air-defence-systems/drone-defence-toolbox

 

It seems like false sense of confidence to think these anti-drone things can work all that well as they haven't really been battle tested.

 

I imagine that much of what's being marketed as anti-drone defense wouldn't be able to stand up to swarms of drones and be easily overwhelmed.

[LC]

1 minute ago, Dalal.Holdings said:

I imagine that much of what's being marketed as anti-drone defense wouldn't be able to stand up to swarms of drones and be easily overwhelmed.

 

Someone tell Taco we need SkyNet. No, not from Terminator....but a gigantic fishing net in the sky

[Dalal.Holdings]

On 6/2/2025 at 6:40 PM, lnofeisone said:

I'm not really sure what you are arguing. I said that tires are there for missile protection. Your article says exactly the same thing. 

 

https://www.twz.com/air/russia-covering-its-aircraft-in-tires-is-about-befuddling-image-matching-seekers-u-s-military-confirms

 

Quote

Russia's efforts to befuddle cruise missiles and drones with imaging-matching seeker capabilities

 

Quote

In a statement, the SBU revealed that the operation relied on domestically developed unmanned systems enhanced by artificial intelligence, trained to autonomously identify airfields and pinpoint vulnerabilities on the aircraft without human input.

 

https://defence-blog.com/ukraine-uses-ai-drones-to-target-russian-bombers/

 

The point being that it's not just missiles, but drones that they are trying to confuse with the tires.

Edited June 3, 2025 by Dalal.Holdings

[Dalal.Holdings]

I don’t think we’re ready

 

[Spekulatius]

On 5/26/2025 at 12:26 AM, lnofeisone said:

Thanks @Spekulatius. BAH is taking a beating in their Civilian and Health work. Their DOD work is holding up well and slowly growing. This is the same reason why the likes of CACI rebounded (though I think CACI will have different problems in 6-12 months). Depending on where the current administration decides to settle on things, BAH might be a good pick-up come mid-term elections. 

BAH is starting to look interesting now. Perhaps we get another leg down but they have over time shown strong ability to grow and defend their margins. A few more confirming datapoints (insider buys, revenue confirmation) would be nice.