Raytheon (RTX)

Over a 2-5 year time horizon, this will do fine, especially following the acquisition of Raytheon. This will diversify their business into the defense space. With low interest rates and good economic growth, this will be a good long term hold in the industrial space.

UTX merger He owns Raytheon and this deal with UTX is a great combination. Before the merger, UTX will spinoff its elevator division--a taxable event for Canadian. For Canadians to lower this tax hit, buy Raytheon. Recommended. UTX may struggle a bit because of Boeing's 737 Max woes (UTX makes engines), but long-term aerospace looks healthy. There are 26,000 commercial planes now, but by 2030 there need to 35,000, outpacing GDP growth. Combined synergies will make this company powerful.

GD vs. Raytheon Both are fine businesses. He owns both. GD has the business jet as well as their marine business (submarines for the US Navy); barrier to entry is strong. GD also has an IT division, a decent business. Raytheon makes missiles and well-positioned to sell to US allies; they also do electronic warfare.

It's his only defence name. They have low debt and anti-missile defence has a lot of demand worlwide. United Technologies will spin out other divisions and merge its aerospace division with Raytheon. He likes each company, but isn't convinced that combining them makes sense. The street is starting to warm up to the merger, but there will be noise around Raytheon for the coming year. Has good company fundamentals.

General Dynamics? A defense stock, but also a hybrid. A good company, but Raytheon and UTX offer more breath--these two are merging. The combination (once they sell non-core businesses) will be a great industrial also involved in defense and cybersecurity. Trades at a good valuation.

This has only so far to run. Their merger will cap the share price. It will trade in a narrow band. The merger will likely go through and make it very competitive long term. He likes this and UTX (the merger company), but he sees more value in UTX after the merger.