March 21, 2022 9:09 AM
One of the longer-term consequences of Putin’s invasion of Ukraine, besides the displacement of millions of people, is a significant rise in defence spending by Western nations to combat the rise and ambitions of autocratic countries, including Russia and China.
Bank of America estimates that U.S. defence spending as a percentage of gross domestic product could rise from around 2.8% to between 3.5% and 4%. There is also upside to European defence budgets, creating opportunities for investors.
One of the leading players in the defence space is Lockheed Martin (LMT), which develops and builds products, including the F-35 stealth fighter, F16s, and Hellfire missiles. LMT is also a leading developer of hypersonic weapons for the U.S. Airforce and Army and has interests in aerospace and civilian jet travel.
The share price of LMT started to rally in early November from its $324 low as evidence of a Russian troop build-up on the border with Ukraine first emerged. After reaching a high of $479 in early March, the share price has fallen by over 14% to a low last week of $411.
Should the share price dip further into the $410/00 support region coming from uptrend and horizontal support, we like accumulating LMT, looking for a retest of the $479 high. The stop loss should be placed below the October 2021 swing high of $378.00.
Source Tradingview. The figures stated areas of March 21st, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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