4 Defense Stocks Your Portfolio Must Have In 2019
Zacks Investment Research | Jan 22, 2019 08:07PM ET
Defense stocks have had a great run since Donald Trump’s ascension to the post of the United States’ President, courtesy of his humongous defense spending plan. Further, Trump’s efforts to improve the U.S. defense forces have also paved the way for the sector’s gains.
Meanwhile, geopolitical conflicts continue to flare up on a global scale, and the magnitude of existing issues carries the potential to bolster growth for U.S. defense companies in 2019 as well.
Moreover, President Trump has allegedly asked his Defense Secretary to present a $750-billion defense budget proposal for fiscal 2020, per a report by Politico. Under such circumstances, adding defense stocks to one’s portfolio seems prudent.
Defense Stocks on a Tear
President Donald Trump has just finished two years in office and defense stocks have rallied significantly. As a matter of fact, the iShares U.S. Aerospace & Defense (ITA) ETF has surged more than 30% since Jan 19, 2017. Moreover, in the same time period, the ETF has also outperformed the S&P 500, which has gained 18%.
Further, gains for the ITA were buoyed by the steady increase in shares of Boeing (NYSE:BA) , AeroVironment (NASDAQ:AVAV) and Aerojet Rocketdyne (NYSE:AJRD) . These stocks have surged more than 200% in the past two years.
America’s Space Ambitions
As proposed by both Vice President Mike Pence and President Trump, the newest branch of U.S. military would be incorporated by 2020. The force would be officially called “Space Operations Force.” America is specifically interested in laying out a layer of sensors in space that can easily detect enemy strikes at the moment of launch.
Pence urged the U.S. Congress to earmark $8 billion over the next five years for the much-ambitious project. He also stated that a fully incorporated space force is going to cost much more.
Notably, the Deputy Defense Secretary, Patrick Shanahan has stated that Pentagon has not commented on the exact cost of the project. Meanwhile, Defense Secretary, James Mattis, who had earlier objected to the program, has now stated that he supports it. (Original post
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