Raytheon (RTX)

Problems with some fan blade components, not as bad as it sounds and limited financial danger. He added to his position in the mid-$80s. He'd buy here. Very attractive on free cashflow yield basis.

It had a manufacturing problem, so was put in the penalty box and fell 10 points. Time to buy it.

Half of its business is in the commercial air space and half in defense. It had some issues with the Pratt-Whitney engines which caused a sell off. However this shouldn't be a long term issue. The parts side is good and spending on defense will likely be maintained.

Likes it, but pull the trigger at $80-83.

Lucrative commercial aerospace division seeing big demand in after-market. OEM business starting to ramp up. Margins on defense should improve with easing of supply chain issues. New orders from international customers.

Mildly cyclical, but lots of excess capital to play offense in a tough environment. Main driver of earnings is still uncovering structural cost savings, plus rebound in commercial aircraft maintenance. Very reasonable valuation. Yield is 2.38%.

Their defence side is doing well due to geopolitical tensions. Aerospace suffered during Covid because nobody was flying, but now the travel rebound benefits this business. There is cost inflation in defence, though. Now plane engine orders are coming. Wait for a pullback to the mid-$90s to buy long term.

Good business with high demand for defense products.
Combination of commercial operations with defense products is strong.
US defense spending continuing to rise.
Expecting 6-7% revenue growth going forward.
8% cash flow yield is very strong. 

Owns shares in business - has performed well.
Defense sector recently pulled back on debt ceiling talks.
Overall, a good name to own for the long term.
Demand for defense spending not going away. 

Reasonable valuation. Going forward, potential for earnings growth and multiple expansion.

Unfortunately, geopolitics (Russian war) is pushing defence spending up around the world. RTX has a good backlog. Another business is commercial aerospace with demand driven by strong travel trends. Air travel should return to pre-pandemic by early 2024. More flights means more airplane servicing, which benefits RTX.

It will grow more than Lockheed. He loves the defence industry for being a cash cow. He comes down to what level you buy shares.

A dual threat with its aerospace business (Pratt-Whitney engines) and defence (mostly missiles) and both are growing. The valuation is not high.

1/3 of its business is in defense, but 2/3 is more of a commercial application. Gives defense exposure plus the boost because of a nascent aerospace cycle.

Really likes it, as you get aerospace and defense, counter-cyclical business. He'd be comfortable buying at current prices.