In this article we discuss the top 5 defense contractors in 2021. If you want to read our detailed analysis of the security and defense industry, go directly to Top Defense Contractors in 2021.
5. Northrop Grumman Corporation (NYSE: NOC)
Number of Hedge Fund Holders: 40
The company Northrop Grumman Corporation (NYSE: NOC) has a $12.068 billion defense contract with the U.S. Department of Defense. The fields of expertise of the company include space, defense, aeronautics, and cyberspace. Even though the majority of the company’s business comes from the U.S., it also provides its services to 25 other countries like Japan, Australia, the United Kingdom, and South Korea. The company is known for its cutting-edge technology, mainly for defense purposes. The most notable products of the company include the X-47B unmanned aircraft, B-2 Spirit stealth bomber, and the Lunar Module.
“New purchases include Northrop Grumman. Northrop Grumman is a leader in manned aircraft, unmanned aircraft, spacecraft and missile-defense systems. We initiated a position in November 2020, as we believe the name is trading at an undeserved discount, despite having the potential to accelerate revenue over the next 24 months. In 2020, Northrup signed a contract to work with the US Air Force on their Ground Based Strategic Deterrent (GBSD) and B21 bomber. We believe the company’s portfolio is well-positioned with a highly desirable space segment business, significant classified content and GBSD driving growth. While the market has been focused on a “blue wave” risk to the defense budget, the industry is typically driven by threat assessment rather than budget constraints. If budget cuts were ever to affect the US Army, that customer represents less than 10% of the company’s revenue. This reinforces our belief that Northrop is well-positioned for the future and trades at an attractive valuation.”