Raytheon (RTX-N)

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.

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.

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.

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.

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. 

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.

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.

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.

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.

Solid. It's pure defence and aerospace (i.e. jet engines), a good combination. Good valuation. They hit a problem with contaminants in engine parts about 18 months ago, which cost them, but the street has since regained confidence in them. He bought more shares around $85, which has paid off.

Is holding, but not buying more. They're in a nice spot straddling the defence and aerospace businesses. It's a defensive business model. The aviation business is booming now.

Likes it, because it has an aerospace business in addition to defence, which is a hedge. The street lost faith in RTX when contaminants got into some of the engines they were building. Shares declined, but this has become a buying opportunity; he bought in the mid-$80s. Negative sentiment eventually fades.

Took a large write down and hit to reputation due to metal contamination in engines. Most of the issue has been corrected. As you correct problems, the market starts to forgive. Not too late to get in. Reasonable valuation, sound business, aerospace side has lots of runway.

Note that this timeframe is short, since last October. His usual holding period is for at least 3-5 years. It was his Top Pick because it ran into some problems, stock sold off, giving him a bigger margin of safety. Stock's bounced back, happy to hold.