A Look at Hedge Funds’ Favorite Defense Stocks Amid U.S. Decision to Lift Arms Ban on Vietnam

#4. Orbital ATK Inc. (NYSE:OA)

– Investors with long position as of March 31: 31

– Aggregate value of investors’ holdings as of March 31: $781.58 Million

The number of hedge fund vehicles monitored by our team with stakes in Orbital ATK Inc. (NYSE:OA) increased to 31 from 26 during the March quarter, whereas the dollar value of those stakes decreased to $781.58 million from $810.88 million. The 31 hedge funds accumulated roughly 15% of Orbital’s total number of outstanding shares. The shares of the aerospace and defense systems company are down 2% since the beginning of 2016. Earlier this month, Orbital ATK announced that it had received a $16 million order for its DSU-33D/B proximity sensors. The delivery of the fuzes, which represent radio-frequency ranging sensors that have the capability to sense the height of a weapon above the target zone, is anticipated to commence in mid-2016. The company currently pays out a quarterly dividend of $0.30 per share, which equates to a dividend yield of 1.38%. Cliff Asness’ AQR Capital Management has 752,117 shares of Orbital ATK Inc. (NYSE:OA) in its portfolio as of the end of March.

Follow Northrop Grumman Innovation Systems Inc. (NYSE:OA)

#3. Lockheed Martin Corporation (NYSE:LMT)

– Investors with long position as of March 31: 37

– Aggregate value of investors’ holdings as of March 31: $867.13 Million

The smart money sentiment towards Lockheed Martin Corporation (NYSE:LMT) remained unchanged during the January-to-March period. Nonetheless, the overall value of the stakes held by the 37 hedge funds invested in Lockheed Martin increased quarter-over-quarter to $867.13 million from $826.81 million. Just recently, analysts at RBC Capital Markets downgraded the global security and aerospace company to ‘Sector Perform’ from ‘Outperform’, citing strong stock performance and a resulting valuation multiple expansion. RBC analysts, who have a price target of $244 on Lockheed Martin, believe that the company may not be able to grow dividend payments at a mid-teens rate while implementing an aggressive share buyback program, as RBC anticipates the dividend to account for roughly 60% of expected earnings per share for 2016. In November 2015, Lockheed Martin completed the $9.0 billion acquisition of Sikorsky Aircraft Corporation, a global company that designs and manufactures military and commercial helicopters; the deal added significantly to the company’s top-line figure in the previous quarter. Shares of Lockheed Martin are 10% in the green year-to-date. First Eagle Investment Management, run by Mehdi Mahmud, reported ownership of 1.34 million shares of Lockheed Martin Corporation (NYSE:LMT) in the latest round of 13Fs.

Follow Lockheed Martin Corp (NYSE:LMT)