Defense contractors

[Xerxes]

20 hours ago, Dalal.Holdings said:

 France is the question mark. The talk is UK’s BAE and/or Sweden’s Saab might replace France’s Dassault. 

Gaullism, as defined as having sovereignty of nuclear & defense technology stack, was so out of fashion decades ago, but now that it has proven it worth many times over, one cannot say Saab or BAE will easily displace the French.
 

BAE is fully an Anglo-American defense contractor. It is more Anglo-American than the mining giant of the same name. Even Saab Gripen is powered by GE engines.
 

Among these European defense names, Dassault is unique. Sadly they never learned to work together with their peers.

[Dalal.Holdings]

4 hours ago, Saluki said:

I've never found big defense contractors to have attractive valuations because they are obvious. I've had good luck with people supplying bigger contractors, like TAYD (double), Optex (+50%), and Kraken (multibagger). I only currently own the last one. 

 

I'm down about 30% on ISSC, but I think it's undervalued and it was beaten down because of lower margin from taking over a Honeywell subsidiary that supplies the military, but management had told people all along that would happen, so the market it weird. There's a nanocap, BOSC, that I had a small position in that looked interesting too. But I've been trimming non-core positions lately and positioning myself for turbulence. 

 

I think Anduril is interesting but overhyped. I did see talk about people buying it before it's public if the SEC permits tokenization and people like Robinhood get in on it for their customers. But that's a weird outcome since the IPO rules are there to protect retail customers, they shouldn't be optional. 

 

I like this idea, but I'm on a mission to pursue this strategy outside the United States: in Europe, and preferably Germany if possible.

 

Let me know if you find any names that will be the suppliers for the future European defense industry because that to me looks more exciting

 

I've added some 4X0.DE (Austrian company). Their management seems highly promotional and their projections very optimistic. If they even achieve a fraction of what they project, I think shares will be ok

 

Edited November 11, 2025 by Dalal.Holdings

[Dalal.Holdings]

If Europeans want to develop a 6th gen fighter on their own, they should, but if they think the 100B Euro budget will be enough, they are kidding themselves. They should look at the F-35 program costs, adjust up for inflation and added technology of achieving 6th gen. They are not budgeting enough for the program at 100B EUR. People will get upset and the headlines will look ugly when the budget far surpasses this number...

 

If you have to work with the French, then you'll probably need to add even more to the cost and the timeline.

[Saluki]

2 minutes ago, Dalal.Holdings said:

 

I like this idea, but I'm on a mission to pursue this strategy outside the United States in Europe, preferably Germany if possible.

 

Let me know if you find any names that will be the suppliers for the future European defense industry because that to me looks more exciting

 

Kraken is a Canadian company and they have some operations in the UK, Denmark and Germany. BOSC is an Israeli company that should benefit for Israel rebuilding it's military after the Gaza fighting, and they might benefit from a shift away from US defense cos, but it's so small that it's hard to figure out where it's going. 

 

There are several drone companies outside the US (one in Australia that I can't remember the name) that are all trying to get in on the action, but anything with "drone" in the name is usually overpriced. Price aside, if you are thinking about flying drones (vs sea), I always thought rather than focusing on the drones (which are relatively cheap), someone is going to make lots of money on the countermeasures like jamming.  The only one in that space I know off hand is Drone Shield, but it's very expensive. There might be others out there, and the countermeasures have to keep evolving, so it has potential to be a long runway. 

 

There is a separate post on Drones and Drone adjacent companies like Taylor Devices on here. 

[Dalal.Holdings]

13 minutes ago, Saluki said:

 

Kraken is a Canadian company and they have some operations in the UK, Denmark and Germany. BOSC is an Israeli company that should benefit for Israel rebuilding it's military after the Gaza fighting, and they might benefit from a shift away from US defense cos, but it's so small that it's hard to figure out where it's going. 

 

There are several drone companies outside the US (one in Australia that I can't remember the name) that are all trying to get in on the action, but anything with "drone" in the name is usually overpriced. Price aside, if you are thinking about flying drones (vs sea), I always thought rather than focusing on the drones (which are relatively cheap), someone is going to make lots of money on the countermeasures like jamming.  The only one in that space I know off hand is Drone Shield, but it's very expensive. There might be others out there, and the countermeasures have to keep evolving, so it has potential to be a long runway. 

 

There is a separate post on Drones and Drone adjacent companies like Taylor Devices on here. 

 

Yes, the problem with a drone company is the nosebleed valuation. I am looking mostly for conventional suppliers that I think will likely need to emerge if the continent is truly going to rearm.

[anshulp]

I think Germany is stuck between a rock and a hard place, not that France is necessarily in a much better position.

 

Germany has the budget and political will to lead on European defense projects, and will soon be the number one spender by a huge margin, but it lacks the technical know how and industrial ecosystem to actually design and produce a next gen fighter on its own. 

 

France still has the capability through Dassault and Safran, and it helps that the Indians are essentially bankrolling a new engine, but Paris is boxed in by a worsening fiscal situation and an unwillingness to share control.

 

If Germany pivots to GCAP, it will probably end up a junior partner again, since the key systems will be built in the UK, Japan, and Italy. I’m also not sure GCAP even fits Germany, since it is geared toward Indo-Pacific priorities and longer range missions that don’t really align with who Germany might be preparing to fight.

 

The same goes for anything with Saab, because Germany would still end up as the junior partner in someone elses program.

[Dalal.Holdings]

 

20 minutes ago, anshulp said:

I think Germany is stuck between a rock and a hard place, not that France is necessarily in a much better position.

 

Germany has the budget and political will to lead on European defense projects, and will soon be the number one spender by a huge margin, but it lacks the technical know how and industrial ecosystem to actually design and produce a next gen fighter on its own. 

 

France still has the capability through Dassault and Safran, and it helps that the Indians are essentially bankrolling a new engine, but Paris is boxed in by a worsening fiscal situation and an unwillingness to share control.

 

If Germany pivots to GCAP, it will probably end up a junior partner again, since the key systems will be built in the UK, Japan, and Italy. I’m also not sure GCAP even fits Germany, since it is geared toward Indo-Pacific priorities and longer range missions that don’t really align with who Germany might be preparing to fight.

 

The same goes for anything with Saab, because Germany would still end up as the junior partner in someone elses program.

Germany has the money and ability to build up its own indigenous program and broader defense sector that can probably surpass all the other european countries in due time.
 

Will it take a while and cost some? Sure. But they can afford it. If Europe wants to be more militarily independent from the U.S., Germany provides the best shot. Germany can become the major European arms maker over time.
 

They have long been the major European industrial/manufacturing powerhouse with high amounts of exports to its neighbors. They can build up the tech know how in defense. There is no reason why what Dassault, Saab, etc have cannot be replicated and even surpassed.

 

Edited November 11, 2025 by Dalal.Holdings

[anshulp]

Time is the key factor. There is a reason why more countries have nuclear weapons over an indigenous fighter jet engine for example. 

 

Not saying the Germans can't do it. 

 

And I fully agree for most programs Germany will overtake the other European countries and be the leader. Another reason why France likely isn't happy! 

 

49 minutes ago, Dalal.Holdings said:

 

Germany has the money and ability to build up its own indigenous program and broader defense sector that can probably surpass all the other european countries in due time.
 

Will it take a while and cost some? Sure. But they can afford it. If Europe wants to be more militarily independent from the U.S., Germany provides the best shot. Germany can become the major European arms maker over time.
 

They have long been the major European industrial/manufacturing powerhouse with high amounts of exports to its neighbors. They can build up the tech know how in defense. There is no reason why what Dassault, Saab, etc have cannot be replicated and even surpassed.

 

 

[Dalal.Holdings]

16 minutes ago, anshulp said:

Time is the key factor. There is a reason why more countries have nuclear weapons over an indigenous fighter jet engine for example. 

 

Not saying the Germans can't do it. 

 

And I fully agree for most programs Germany will overtake the other European countries and be the leader. Another reason why France likely isn't happy! 

 

 

 

Yeah I think there are good reasons for why a country like France seems ahead of Germany now. De Gaulle's influence helped them build up militarily during the cold war as @Xerxes pointed out. Germany in the meantime was split into pieces throughout the Cold War and has only been reunified since 1990. They have also leaned more towards pacifism/self defense only due to World War 2 (similar to Japan).

 

Then, after the Cold War, there was a "Peace Dividend" where European nations felt they no longer needed to contribute to their own defense after the collapse of the Soviet Union (meanwhile, a guy in Russia named Vladimir Putin bided his time...). So all the European countries neglected defense and many instead padded their social safety nets since the 1990s...

 

Well, the day for the reawakening is here. Putin (and Trump) are the catalysts...

 

I don't think Germany will go nuclear and I don't think they really need to in order to have high end military sector. They can rely on NATO/France/UK for nuclear umbrella. 

 

Edited November 12, 2025 by Dalal.Holdings

[anshulp]

Yep decades of underinvestment in the western part of the continent. Will take a lot of money and time to fix. 

2 minutes ago, Dalal.Holdings said:

 

Yeah I think there are good reasons for why a country like France seems ahead of Germany now. De Gaulle's influence helped them build up militarily during the cold war. Germany in the meantime was split into pieces throughout the Cold War and has only been reunified since 1989.

 

Then, after the Cold War, there was a "Peace Dividend" where European nations felt they no longer needed to contribute to their own defense after the collapse of the Soviet Union (meanwhile, a guy in Russia named Vladimir Putin bided his time...). So all the European countries neglected defense and many instead padded their social safety nets since the 1990s...

 

Well, the day for the reawakening is here. Putin (and Trump) are the catalysts...

 

I don't think Germany will go nuclear and I don't think they really need to in order to have high end military sector. They can rely on NATO/France/UK for nuclear umbrella. 

 

[Spekulatius]

Korean  submarines for Canada, It looks like:

https://canadiandefencereview.com/hanwha-ocean-signs-mou-with-pcl-construction-for-cpsp/

[Xerxes]

Carney should have the Korean submarine deal conditional of Canadians being able to invest into Korean stock market. *sigh*

[Dalal.Holdings]

1 hour ago, Spekulatius said:

Korean  submarines for Canada, It looks like:

https://canadiandefencereview.com/hanwha-ocean-signs-mou-with-pcl-construction-for-cpsp/

 

I would not rule out TKMS' 212CD sub so easily. Canada needs a NATO compatible sub that can effectively patrol the arctic. Germany has also suggested that some of these subs could eventually be manufactured in Canada.

[Dalal.Holdings]

https://finance.yahoo.com/news/japan-takaichi-few-good-options-111135238.html

 

Quote

For Beijing, Takaichi’s remarks were not a blunder as some have suggested, but are in-keeping with her right-wing stance, two researchers at a top government think tank in Beijing wrote on Sunday in state media. They called her “a spokesperson for Japan’s new militarism,”

 

More and more countries are taking an assertive stance. Japan and Germany seem to be on a similar trajectory of reawakening long dormant military forces...

 

Overall, I think it is good to have more counterweights to Russia and China

 

Edited November 17, 2025 by Dalal.Holdings

[Dalal.Holdings]

https://www.bloomberg.com/news/articles/2025-11-21/ukraine-and-european-allies-reject-key-parts-of-us-russian-plan?srnd=homepage-americas

 

Quote

 

Under the plan, a copy of which was seen by Bloomberg News, the Ukrainian regions of Crimea, Luhansk and Donetsk would be “recognized as de facto Russian, including by the United States,” Ukraine would also be required to hold elections in 100 days, give up any hope of NATO membership and slash the size of its armed forces. 

Quote

Kyiv’s biggest European allies have lined up with Zelenskiy to push back against elements of the plan, which would force Ukraine to give up large chunks of territory taken by Russia, acceding to many of President Vladimir Putin’s wartime demands.

Quote

There are doubts among European leaders about the status and legitimacy of the plan, one official said. They also characterized it as tantamount to a capitulation by Ukraine with Russia getting what it wants, the official added, requesting anonymity to talk freely on the matter.

 

The cost of not having independent & capable armed forces should be clear now to European countries. They sat around for decades not contributing to their militaries. If European countries want a seat at the table, they'll have to come up with a real military force...

 

Europe does not have much leverage in these negotiations today and it's quite a sight to see

 

[Dalal.Holdings]

https://www.reuters.com/business/aerospace-defense/european-defence-stocks-fall-signs-us-push-over-ukraine-war-2025-11-19/

 

Quote

Shares in Rheinmetall (RHMG.DE), opens new tab, Renk (R3NK.DE), opens new tab, BAE Systems (BAES.L), opens new tab, Leonardo (LDOF.MI), opens new tab, Saab (SAABb.ST), opens new tab were among the biggest fallers on a steady pan-European STOXX (.STOXX), opens new tabindex, with losses ranging from 4% to 7%.

 

Peace in Ukraine might be short term bearish for these companies, but I'm having a hard time seeing NATO countries being able to pull back from their spending targets, even if the war does end. DJT (and JD Vance) has made it clear he will hold them to account for meeting their targets and Merz seems intent on boosting spending. I think if the sell off persists long enough in Euro defense names, there will be some good opportunities

[Spekulatius]

On 11/17/2025 at 10:11 AM, Dalal.Holdings said:

https://finance.yahoo.com/news/japan-takaichi-few-good-options-111135238.html

 

 

More and more countries are taking an assertive stance. Japan and Germany seem to be on a similar trajectory of reawakening long dormant military forces...

 

Overall, I think it is good to have more counterweights to Russia and China

 

The peace plan looks worthless to me. No details on guarantees, Ukraine gives something with nothing in return but a promise from Putin which is worthless. Putin has no intend to make peace as long as he thinks he is winning.

 

The problem that Trump has with negotiating with Putin is that he has:

1) no real stake in the outcome

2) no patience

 

Putin has both - a stake in the outcome and a lot of patience.

Edited November 22, 2025 by Spekulatius

[Dalal.Holdings]

19 minutes ago, Spekulatius said:

The peace plan looks worthless to me. No details on guarantees, Ukraine gives something with nothing in return but a promise from Putin which is worthless. Putin has no intend to make peace as long as he thinks he is winning.

 

The problem that Trump has with negotiating with Putin is that he has:

1) no real stake in the outcome

2) no patience

 

Putin has both - a stake in the outcome and a lot of patience.

 

Sure, the deal in current form looks lopsided against Ukraine. My overarching point though is Europe has had since 2014 to prepare for this moment and they have not. European leaders were not even included in drafting this thing. They have no seat at the table.

 

Today is their reckoning for not building up their forces. Merz/Macron/Starmer look absolutely clueless. If they had the capabilities, they could tell Ukraine "we'll back you even if the U.S. stops sharing intel and weapons". The problem is they don't.

 

Quote

The US increased pressure on Zelenskiy to agree to the deal with a threat to stop intelligence-sharing and weapons supplies to Ukraine unless Kyiv agrees to the peace plan by next Thursday, according to people familiar with the matter.

 

I am hoping this is a wake up call to European leaders and I am positioned accordingly in European defense names, but I am also wary that if the war ends, Europeans will find yet another excuse to kick the can further down the road and not invest in their own defense capabilities. However, I think Trump is unlikely to allow NATO countries to underinvest in defense anymore...

[Spekulatius]

We will see. The aid from the US this year has already pretty much stopped but it is true that the intelligence sharing provided by the USA is hard to replace. So, I don’t know the answer but I do know that giving something to Putin nothing in return isn’t going to stop the war.

 

Trump is not equipped to deal with Putin and I think neither do the Europeans. So I think the war will go on with Ukraine mostly supported by Europeans and Russia grinding along.

 

One commentator said that Russias advance in terms of territory  is less than the speed of a snail actually.

Edited November 22, 2025 by Spekulatius

[Dalal.Holdings]

https://www.reuters.com/business/aerospace-defense/us-sets-2027-deadline-europe-led-nato-defense-officials-say-2025-12-05/

 

Quote

WASHINGTON, Dec 5 (Reuters) - The United States wants Europe to take over the majority of NATO's conventional defense capabilities, from intelligence to missiles, by 2027, Pentagon officials told diplomats in Washington this week, a tight deadline that struck some European officials as unrealistic.

The message, recounted by five sources familiar with the discussion, including a U.S. official, was conveyed at a meeting in Washington this week of Pentagon staff overseeing NATO policy and several European delegations.

80 years is a long time to be asleep.

 

Wake up, anon--the world has changed.

 

Edited December 5, 2025 by Dalal.Holdings

[Dalal.Holdings]

https://www.bbc.com/news/articles/ckg9drg8pg1o

 

Quote

Germany's parliament, the Bundestag, has voted to introduce voluntary military service, in a move aimed at boosting national defences after Russia's full-scale invasion of Ukraine.

It marks a significant shift in Germany's approach to its military and follows Chancellor Friedrich Merz's push to create Europe's strongest conventional army.

The change means that all 18-year-olds in Germany will be sent a questionnaire from January 2026 asking if they are interested and willing to join the armed forces. The form will be mandatory for men and voluntary for women.

Quote

Students at schools across Germany have said they will join strikes in as many as 90 cities on Friday to protest against the move.

 

Many young Germans either oppose the new law or are sceptical.

"We don't want to spend half a year of our lives locked up in barracks, being trained in drill and obedience and learning to kill," the organisers of the protests wrote in a statement posted on social media.

"War offers no prospects for the future and destroys our livelihoods."

It seems many European citizens have grown accustomed to the benefits of American protection.

 

When they are even asked to get a form to volunteer to defend their country, they go nuts and protest...

[Spekulatius]

Well, when I grew up, the service wasn’t voluntary. ( I was deferred and never went be used by the time I finished my University time, the wall came down and the Bundeswehr size was reduced).

 

Then on the other hand, introduce a draft in the US and see what happens….

[Marco Van Basten]

1 minute ago, Spekulatius said:

Well, when I grew up, the service wasn’t voluntary. ( I was deferred and never went be used by the time I finished my University time, the wall came down and the Bundeswehr size was reduced).

 

Then on the other hand, introduce a draft in the US and see what happens….

We have to register at 18, I, and every male I knew in high school registered, not that anyone of us wanted to go to war.

[Spekulatius]

7 minutes ago, Marco Van Basten said:

We have to register at 18, I, and every male I knew in high school registered, not that anyone of us wanted to go to war.

Thats very different from a draft though. Every German (male or female) is registered in Germany anyways.

 

I am not sure why people in Germany or elsewhere would object to voluntary service at Armed forces or civil service for that matter 

Edited December 6, 2025 by Spekulatius

[Dalal.Holdings]

https://www.reuters.com/business/aerospace-defense/powerful-german-union-calls-dassaults-expulsion-fighter-jet-programme-2025-12-10/

 

More bickering. Will be interesting to see how talks go...

 

Quote

BERLIN, Dec 10 (Reuters) - Germany's powerful IG Metall union has warned it will stop cooperating on a Franco-German fighter jet programme if France's Dassault Aviation (AM.PA)

, opens new tabremains involved, escalating tensions ahead of ministerial talks on Thursday.

The union's stance adds to signs of worsening relations between German and French industry over the Future Combat Air System (FCAS), a 100-billion-euro ($116 billion) project launched more than eight years ago but stalled by disputes over workshare and technology rights.

Quote

"We are happy to collaborate with French businesses but not with Dassault," IG Metall's deputy chief Juergen Kerner said in a letter to German Defence Minister Boris Pistorius and Finance Minister Lars Klingbeil dated December 8, and seen by Reuters.