September 27, 2024
Reagan's Star Wars Is Finally Real
Dear Subscriber,
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| By Michael A. Robinson |
The U.S. military just made history with a weapon that sounds like something straight out of science fiction.
It even bears a resemblance to the type of technology Ronald Reagan envisioned in what the media at the time dubbed Star Wars.
This latest development went largely unreported by today’s media. But as someone who reported on Star Wars tech back in the day, you can bet it grabbed my attention.
It’s the type of disruptive technology that can have a major impact on the global defense sector that Markets and Markets pegs at $1.7 trillion.
In a moment, I’ll reveal the storied leader set to profit from the increased use of lasers for defense and communications.
Its stock recently rallied more than 24% in three months on a classic beat-and-raise quarter …
This storied leader has blown away the S&P 500 in the past three months.
Source: YCharts.
Click here to see full-sized image.
Next-Gen Defense
Don’t worry if you’ve never heard of BlueHalo. Because it’s not a conventional defense firm, most investors haven’t.
See, BlueHalo is a next-generation defense company focused on the future of weaponry.
With backing from Arlington Capital Partners, the company has built a tech-driven defense firm that spans lasers, AI, autonomous systems and everything in between.
These disruptive tools are focused on air, land and sea deployments as well as space.
And in this turbulent market, the defense sector shouldn’t be ignored.
Recent Bank of America research has shown that the defense sector has been annually outperforming the S&P 500 and the Dow by double-digits since 2009.
Believe me, I’m talking from experience. I started following this sector in depth in the late 1980s when I was the Silicon Valley bureau chief for my dad’s high-tech military newsletter.
I met with leading executives and scientists involved in cutting-edge military programs.
Along the way, I also covered defense technology including lasers for the Defense Media Network and Signal magazine.
Lasers On the Battlefield
That’s why BlueHalo’s work jumped out at me.
The company is one of the first to deploy directed energy defensive weapons (aka, lasers) for the U.S. Army in the Middle East.
But “point and shoot” is too simplistic a concept when it comes to these systems. They locate, track and then fire a powerful laser at the target from the back of a ruggedized military vehicle.
That’s a complex system that uses AI to make these calculations in real time.
Then, when the laser is fired, it has to stay with that target until it can “kill” it using the intense heat.
Talk about new efficiencies!
Sure, shooting down drones saves lives. But at quite a cost. We’re talking $6 million to $10 million per missile.
This new laser-based mobile technology is what Ronald Reagan was hoping Star Wars could deliver all those years ago.
Unfortunately for investors, BlueHalo isn’t publicly traded yet.
But that’s OK because there’s another company that I love.
It is publicly traded, and its stock is surging.
A Lion Roars
The company is none other than industry icon, Lockheed Martin (LMT).
It’s one of the largest defense companies in the world, so it has its hands in all manner of systems.
We’re talking about everything from state-of-the-art F-35 fighters and helicopters … to naval ships, advanced intelligence and surveillance tech … to electronic warfare.
And, of course, laser weapons.
LMT has been researching and developing laser technology for almost 40 years now.
The challenge is very similar to early generations of computers. The power source needed to be so big that it wasn’t practical to deploy in any real way.
But that’s changed significantly. And the first proof of concept for mobile-directed energy weapons is now underway in the Persian Gulf, the Middle East and Ukraine.
LMT now has six different laser systems that are in testing or deployed at this point.
See one of them in action here.
HELIOS (High Energy Laser with Integrated Optical dazzler with Surveillance) has been deployed to ships in the Persian Gulf.
It’s downing many of the drones the Yemeni Houthis have been shooting at ships to disrupt the oil flow.
Not only are laser systems more efficient than traditional weapons, but they can operate for hours on end.
There’s no need for massive stores of ammunition, which is both dangerous and heavy.
As a result, the cost per engagement is minuscule.
This is the future of combat systems. And it’s already in the field.
Surprising Wall Street
Make no mistake. Lockheed’s success goes well beyond lasers.
It recently announced it has received approval for full production of F-35 advanced fighter jets for the Air Force, Marine Corps and Navy. The goal is 700 in total by 2030.
Also, in recent weeks, the firm has acquired a maker of a high-throughput robotic modular space vehicle … it’s won new cargo plane deals with India, New Zealand and Egypt … and it’s secured a $1.3 billion Javelin missile contract with the U.S. Army.
Lockheed recently surprised Wall Street with a classic beat-and-raise quarter, which Wall Street particularly loves.
Granted, it was a small increase in earnings growth. But the Street knows LMT is on a roll.
While it’s been a challenging environment for defense firms lately, LMT reported a 3.3% increase in per-share profits. And that’s a huge improvement over the 4% decline the market had forecast.
The report sent shares into a strong uptrend back on July 23 with the stock up nearly 20% in two months. That demolishes the S&P 500, which roughly broke even over the same period.
And given the global threats swirling right now, you can be sure that LMT will be in the thick of it for years to come.
In other words, this diversified defense and aerospace leader is laser-focused on protecting the nation. And investors with this stock in their crosshairs can sleep well knowing their nest egg has that same level of safety within it.
Best,
Michael A. Robinson
P.S. Defense isn’t the place for exciting new tech. Something huge is happening in biotech and drug discovery. Check it out here.
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