Gordon Reid Raytheon RTX-N BUY Jul 15, 2024

Aerospace will benefit from global travel over the long term. Appears on-schedule to absorb the charges required to replace faulty engine components. Valuation catchup once this issue is behind them. After-market stream of revenue for servicing parts is very profitable. Yield is 2.46%.

With all the geopolitical uncertainty, the defense side should see strong growth. Order backlog is at historical highs.

Trades at 22x PE, but is not expensive and pays a 2% dividend yield. Pare back only if it's a large holding, or hold.

Trades at 22x PE, but is not expensive and pays a 2% dividend yield. Pare back only if it's a large holding, or hold.

He sold it because of problems with one of their engines. That was a mistake. They solved that issue and demand for defence remains. A good company.

Aerospace division challenged, as BA and Airbus are having a difficult time delivering planes. On the flipside, current planes have to stay in service longer and need replacement parts, so RTX has benefited. Selloff on engineering problems proved to be overdone.

An aerospace and defence aspect to it. There is interest due to geopolitics (eg. Ukraine, Israel, Taiwan). The safety of the aerospace aspect of this business is a good thing to have. Good growth in this area. New plane adoption is ramping up, due to fuel efficiency making money for airlines. Had a stumble a number of years ago due to discovery of contaminants in their production. They recovered from it. Knows that markets tend to forgive mis-steps if there is a constructive solution. 

Share had dipped because contaminants had gotten into a system, so he put during that momentary weakness. He likes their mix of commercial and defence industries.

Has a big defense contracting business. But Trump will cut defence spending, and will cut a truce between Russia and Ukraine and calm the Middle East war. Don't be in this space. RTX's valuation is too hight.

Sold last year once more of the value from its initial spinoff was realized. See his Top Picks for recycling the capital proceeds into another opportunity with a similar playbook.

Stock uplift partially due to engine defect costs being on track. Defense segment benefiting from geopolitical tensions and improving Covid-era supply issues. Record backlog. She'd buy here.