General Dynamics Corp. (GD)

Has liked this for many years. Its been a very good consistent performer. In technology of aerospace and communication systems which will go into tanks and airplanes, which is where military spending is going. Trump gave it an even bigger boost. Dividend yield of 1.8%. (Analysts’ price target is $205.50.)

(A Top Pick Dec 3/15. Up 28.04%.) Has done very, very well, especially given the fact that one of Trump’s stated priorities is to increase defence spending. He took his profits from this and switched to another industrial name.

Defence is a theme he has been focused on for about 2 years. Technically the group has broken out. Defence companies are the only ones that never tell you what is coming next. There is a built-in optionality for the things that they are developing, but they are secret. Coming into the election, we knew that either candidate would be spending more money on defence.

Raytheon (RTN-N) or General Dynamics (GD-N)? In defence, spending is expected to decrease, not increase. Most of the growth is expected to come from outside of the US. This one is trading at fair value and she would call this a Hold. Raytheon looks slightly more attractive.

(Market Call Minute.) Defence spending is going up no matter who wins the US presidential election.

A defence company, so slower growth, a very strong cash flow generator. Doesn’t have a huge amount of growth, but provides a dividend yield of about 2%.

This is about one quarter aerospace with the rest in military defence. The world’s 4^th largest military contractor. They make the Gulfstream jets, submarines and combat vehicles. With the US presidential election coming up, there is going to be more increased scrutiny and more spending on defence and security budgets. The stock hasn’t done very much in the last 12 months, but that has created a bit of a valuation play. Just announced a $10 million share buyback. Trading at 16X forward earnings with a 9%-10% growth rate. Dividend yield of 1.94%.

Had a pretty good year in terms of demand, but it hasn’t translated into the share price going up. Has a pretty meaningful backlog, which is up close to 55% year over year. They already produce about 30% of the world’s business jets. He doesn’t own this primarily because the stock has really run up coming into this year. The wildcard is what is going to happen with the US government with the election coming. They generate about 85% of their revenue from the US government.

Has had a great move. There are a couple of big projects in the defence space including a long-range strategic bomber, and he thinks Northrop (NOC-N) gives a better leverage to that with the better risk/reward ratio. This is a very good company with a good outlook for defence spending.

It has had a good run. Russia and the Ukraine will focus investors on defense stocks. But this one is very overbought.

Thinks you will see a rethink of US policy toward Russia so he would be inclined to hold it here. He holds BA-N.

Is in a trend channel right now. It could move to the bottom of the trend channel.