5 Defense Stocks to Buy As Geopolitical Tensions Rise

In this article, we discuss the 5 defense stocks to buy as geopolitical tensions rise. If you want to read our detailed analysis of these stocks, go directly to the 10 Defense Stocks to Buy As Geopolitical Tensions Rise.

5. Lockheed Martin Corporation (NYSE:LMT)

Number of Hedge Fund Holders: 42      

Lockheed Martin Corporation (NYSE:LMT) is a security and aerospace firm. Elite hedge funds hold large stakes in the company. Among the hedge funds being tracked by Insider Monkey, New York-based firm Millennium Management is a leading shareholder in Lockheed Martin Corporation (NYSE:LMT) with 399,809 shares worth more than $142 million. 

On February 28, Wolfe Research analyst Michael Maugeri upgraded Lockheed Martin Corporation (NYSE:LMT) stock to Outperform from Peer Perform with a price target of $467, noting that stronger international military spending in the wake of the Russian invasion of Ukraine would help lift defense stocks higher in the coming months. 

At the end of the fourth quarter of 2021, 42 hedge funds in the database of Insider Monkey held stakes worth $976 million in Lockheed Martin Corporation (NYSE:LMT), compared to 51 in the previous quarter worth $1.2 billion.

In its Q4 2020 investor letter, RiverPark Advisors, LLC, an asset management firm, highlighted a few stocks and Lockheed Martin Corporation (NYSE:LMT) was one of them. Here is what the fund said:

“Despite better-than-expected third quarter results, LMT shares were weak for the quarter as defense spending is expected to be flat for the coming year. With a record $150 billion backlog and almost 30% of its revenue coming from building F-35 aircraft with deliveries forecast to reach 180 per year in 4-5 years (3Q’s revenue upside was from the F-35), we believe LMT should grow at a higher rate than overall defense budget growth and Street expectations over the next several years. Further, strategic acquisitions (LMT acquired AJRD for $4 billion in late December), debt pay down, a 3% dividend yield, and continued share buybacks from $6 billion per year of free cash flow should lead to even greater shareholder returns.”