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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (34919)	7/27/2009 9:54:27 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78774

re GD - playing D-Fense today with NOC at 42.8$. Pension woes are real but also affect all competitors, so i am guessing they will be priced in their products long term.

To: Paul Senior who wrote (34919)	7/28/2009 8:15:26 AM
From: gcrispin	2 Recommendations Respond to of 78774

I've also been looking at the defense sector and agree with you that it is hard for the individual investor to determine the winners and losers. That said, I believe that the defense industry is at an inflection point where dollars will be reallocated. A recent article in Foreign Affairs highlights the challenges the US is facing in crafting a defense policy for future threatening situations. It is well worth reading. csbaonline.org I think the following document and article also sheds light on the direction of defense funding. usacac.army.mil nytimes.com One of my conclusions is that future allocations will be made to UAVs and assets that are cyber in nature. pbs.org finance.yahoo.com One company that I have taken a position in is KTOS. In its previous incarnation the company focused on building wireless infrastructure. But in the last two years it has sold off those assets and focused on defense. It's more of a turnaround than a value stock. In fact, with the impairment charges one can argue that the stock has little value. For that reason it trades at below a dollar. Nevertheless the company is cash flow positive. I believe it is positioned in several areas that will benefit from future defense expenditures and has little exposure to the areas of defense that will be subject to be cut. Below is their most recent shareholder presentation. files.shareholder.com I also outlined some of the other reasons I bought on a previous post on another board. I've built a position in the seventy cent range and am waiting for second quarter results. Message 25752089