| Defense Stocks : The US Defense budget is expected to grow considerably after the attacks. The U.S. defense industry has undergone dramatic consolidation resulting in the emergence of four dominant prime system contractors: Boeing (BA 43.46), Lockheed Martin (LMT 38.32), Northrop Grumman (NOC 81.94) and Raytheon (RTN 24.85). Others with large defense exposure include General Dynamics (GD 75.97), the Navy's leading supplier of combat vessels, and TRW (TRW 33.89), which provides systems engineering, research and technical services. The caveat is that Boeing will be under pressure as the concern of lower air travel demand weighing on its commercial business will overshadow its defense segment. Earlier this year, there was much talk of defense budget cuts. We believe that the attacks fundamentally alter the country's attitudes for the long term...There are over 1,400 airports worldwide providing service for roughly 2.5 billion passengers per year. Of these airports, over 550 are located in the US. The FAA has already said that security at airports will be beefed up which will help security equipment suppliers....Briefing.com expects some small cap bomb detection stocks to trade higher next week including Magal Security (MAGS 4.99). InVision (INVN 3.11) makes 3D scanners while Viisage Tech (VISG 1.94) sells face recognition software...BusinessWeek is highlighting a couple of stocks that could benefit: Intelli-Check Inc (IDN 8.60), a provider of document verification systems and Armor Holdings (AH 14.30), a security gear maker....While all defense will be bolstered, there will be an immediate focus on ISR (intelligence, surveillance and reconnaissance) abilities. An interesting company is L-3 Communications (LLL 63.00), which is much more focused on ISR than the diversified names above. LLL sells secure, high data rate communications for military and other US reconnaissance and surveillance applications. -- Robert J. Reid, Briefing.com |
