A Pair of Top PowerRatings Defense Stocks for Investors: LMT, GD
Is war good for business? Opinions vary. But we know that high PowerRatings stocks are great for investors looking for investments that are likely to be more reliable and better performers than the average stock.
Popular mythology suggests that defense stocks began soaring in the days leading up to the American invasion of Iraq. But a quick check of the charts shows that defense and aerospace stocks were a mixed bag in 2003.
So if we can’t count on a war to get defense stocks moving what can we count on? You won’t be surprised to learn that we think our Long Term PowerRatings are a better tool for spotting which stocks are likely to outperform than guessing which events in the world will benefit which stocks. Our Long Term PowerRatings are based on more than a decade of quantified historical research involving thousands of stocks and simulated stock trades.
This research enabled us to develop a rating system from 1 to 10 that makes it possible for active investors and long term traders to see, at a glance, which stocks are among the most attractive candidates for investment and which stocks should be set aside – or even sold – for the time being.
It just so happens that among the stocks that our Long Term PowerRatings have revealed to be superior investments in recent days includes a pair of stocks from the defense and aerospace industry – a top-rated industry group. These two stocks have Long Term PowerRatings of 8 and 9, meaning they are among the most reliable and best performing stocks – based on our historical testing – that active investors have to choose from right now.
Lockheed Martin [LMT@LMT]
Lockheed Martin is the top stock in the Defense and Aerospace industry on a Long Term PowerRatings basis, having earned a rating of 9. Our research indicates that stocks with Long Term PowerRatings of 9 have been higher one year later more than 79% of the time on average. This compares favorably to the average stock, which has been higher one year later less than 68% of the time.
Additionally, as a 9-rated stock, Lockheed Martin belongs to that class of stocks that have outperformed the average stock, as well. We found that 9-rated stocks actually tended to gain more than 18% after one year – compared to between 12-13% for the average stock.
General Dynamics [GD@GD]
The other top rated stock in the Defense and Aerospace industry is General Dynamics, a stock we featured in our Stock Spotlight one month ago. Click here to read our PowerRatings research on General Dynamics.
General Dynamics has a Long Term PowerRating of 8. And while this is slightly less than that of Lockheed Martin above, it still represents an attractive investment candidate compared to the average stock. Stocks with Long Term PowerRatings of 8 have been higher one year later more than 74% of the time. These same stocks have also tended to gain, on average, more than 17% after one year.
Looking for more long-term solutions to your investing problems? Don’t let the volatility of this market lead you to miss out on stocks you’ll be glad to have bought a year from now.
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David Penn is Senior Editor of PowerRatings.net.