If you work in the defense industry, investing your hard-earned funds back into the sector might seem like an easy decision. As the Russia-Ukraine conflict continues, the entire world may be starting to think the same thing. The industry may be poised for growth, as countries across the globe reconsider investments in their own national defense.
Building Your Defense portfolio
The top defense stocks for March pointed to companies like KBR and Amazon as good options to buy, and noted growth at Lockheed Martin, General Dynamics, Northrop Grumman, L3Harris Technologies, Elbit Systems, SAIC, and Leidos. So, what should you keep in mind if you’re trying to add defense companies to your stock portfolio?
1. Monitor major awards
The US Government is a major player in the defense industry, and when they award large contracts to companies, it can be an indicator of growth. While it’s certainly not a guarantee of growth, major awards can affect stock prices in the short term, and can be a good indicator of the health and prospects of a company.
2. Watch hiring trends
Hiring more employees can be another good indicator of growth. An expanding workforce means more jobs, more projects, and possibly rising stock prices. Defense contractors hiring can help identify which companies are hiring now.
3. Monthly top defense stocks
Each month, ClearanceJobs releases an article summarizing the monthly top defense stocks, where you’ll get a rundown of the best stocks to buy according to experts in the field.
4. Listen to the experts
One investment expert has weighed in and identified four defense contractors to invest in this year: General Dynamics, Huntington Ingalls Industries, Lockheed Martin, and Northrup Grumman. According to this source, “each appear as fundamentally strong, below average risk defense contractors whose common shares are currently trading at reasonable, if not bargain prices.”
Watching trends like hiring, layoffs, and major awards can help you choose defense companies to invest in. The stock market can be unpredictable, but background research and input from experts can help you make wise investments for your future.
*This article is intended to be informational only; it is not financial advice.