How BAE Systems PLC (ADR) (BAESY) Measures up as a GARP Investment

The effect of budgetary constraints in Washington, combined with a reduction in combat operations in Afghanistan in coming years, is likely to crimp hardware demand from the U.S. However, BAE Systems — which derives 40% of total turnover from the country — remains a critical supplier to the country’s armed forces.

Just this week the company, through its role as subcontractor to Support Systems Associates, was awarded a $1.5 billion contract for a five-year duration to provide aircraft engineering solutions and logistics to the U.S. armed forces.

Although fears of reduced Western spend continues to hamper confidence in BAE Systems, I believe that the company is a great GARP stock. Its position at the forefront of battleground technologies makes it an important supplier to the world’s largest military superpower. Coupled with this, I expect rising exposure to lucrative new geographies to underpin strong earnings expansion moving forwards.

The article How BAE Systems Measures up as a GARP Investment originally appeared on Fool.com is written by Royston Wild.

Fool contributor Royston Wild has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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