BONUS: 113% Before 10 AM  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

March 01, 2026   |   Read Online Top 5 Defense Plays (and Whether They're Cheap) BONUS: 113% Before 10 AM First a message from our friends at Base Camp Trading (Sponsor) 113% Before 10 AM Hey Trader, Before the market opens again, read this... My top trader, Thomas Wood, just released a new strategy he calls Opening Bell Trades. This simple system is designed specifically to help regular investors generate income from his #1 trade setup. I'm talking about finding monster winners like these... 113% on GOOGL 240% on META 70% on CAG 37% on MCD 139% on GLD Best of all, he looks for these trades every morning starting at 9:30 AM and by 10 he's done. Everything you need to know about how this works is in a free report called "The Opening Bell Trade Guide"... Take a few seconds and download FREE right now before this link stops working. This report won't be free forever, so grab it now while you can. Once it's on your computer, you'll have it for good-no matter what we charge other traders for it later. No credit card required. No strings attached. >> Get Your FREE "Opening Bell Breakouts" Trade Guide Here This guide shows you the exact 15-minute window trade he uses, and how to spot the setups the big funds are watching. FREE: Discover One Simple Options Trade You Can Make Each Morning – and Be Done by 10 AM. To better trading, Drew Day Founder & CEO Base Camp Trading P.S. Inside, you'll see why Thomas uses weekly options and how to use them to trade stocks like GOOGL, META, and TSLA with as little as $75. Go here to save a copy of the "Opening Bell Trade Guide" before its taken down. FEATURED ARTICLE Top 5 Defense Plays (and Whether They're Cheap) Geopolitics is heating up. Government spending is expanding. Missile inventories are being rebuilt globally. And the primes — the big contractors — are printing backlog numbers that would make most industrial CEOs jealous. But here's the Cheap Investor question: Are they actually cheap… or just expensive stocks with good headlines? Let's break it down Top 5 style. 1) RTX Corporation (RTX) Scoreboard 2025 revenue: ~$74B Adjusted EPS: mid-$5 range Backlog: ~$200B+ Major exposure: Patriot, AMRAAM, missile defense, Pratt & Whitney engines RTX is one of the cleanest plays on missile replenishment and air defense demand. The Real Reason It's Moving Missile usage globally is running ahead of production capacity. Governments are accelerating orders for: Patriot interceptors AMRAAM air-to-air missiles Radar modernization This directly benefits RTX's Raytheon segment. Is It Cheap? RTX trades at roughly: ~18–20x forward earnings Mid-single-digit revenue growth Expanding margins as supply chain stabilizes For a company with: Massive backlog visibility Multi-year contracts Government counterparty risk (low default risk) That multiple isn't "deep value." But it's not "priced for perfection" either. Verdict: Reasonably valued quality compounder. Not a screaming bargain — but durable. 2) Lockheed Martin (LMT) Scoreboard Revenue: ~$67B+ Backlog: ~$160B+ F-35 program anchor PAC-3 missile defense exposure Lockheed is the backbone of U.S. air dominance and high-end missile systems. What the Market Is Really Saying Missile replenishment cycles (JASSM, PAC-3, HIMARS rockets) are driving incremental orders. But F-35 delivery pacing and program politics create noise. Valuation Check ~17–19x forward earnings Strong free cash flow Dividend yield typically ~2–3% This is a "cash return + backlog visibility" name. Verdict: Closer to fair value than cheap. Attractive on pullbacks, not when chasing headlines. 3) Northrop Grumman (NOC) Scoreboard Revenue: ~$40B+ Backlog: ~$80B+ B-21 Raider exposure Strategic missile & space programs Northrop is the stealth and next-gen defense play. The Thesis High-margin, long-duration classified programs = stable earnings power. Missile and strategic modernization spending are secular drivers. Valuation ~19–21x earnings Higher margin profile than some peers Lower dividend yield but stronger margin expansion potential Verdict: Premium multiple justified by program mix. Not cheap — but not bubble territory either. 4) L3Harris (LHX) Scoreboard Revenue: ~$19B+ Heavy exposure to ISR, sensors, electronic warfare Strong 2026 growth outlook LHX is less headline-driven than missile pure plays but deeply embedded in modernization. Why It Matters Modern wars aren't just missiles. They're: Sensors Drones Secure communications Space-based systems L3Harris sits in that sweet spot. Valuation ~16–18x earnings Solid margin trajectory Integration improvements post-mergers Verdict: Arguably the most "value-tilted" of the group. 5) Missile Supply Chain & Specialists This is where things get interesting. Mid-tier suppliers feeding propulsion, guidance, and solid rocket motors often: Grow faster Trade at higher multiples Carry more volatility They can look expensive — 22–25x earnings — but have higher upside torque. This is where asymmetry can live. The Macro Tailwind: Government Spending Global defense budgets are rising: U.S. spending remains elevated NATO members increasing % of GDP allocations Missile stockpiles globally running low Multi-year replenishment cycles likely The key point: Defense demand is no longer cyclical. It's structural. That changes valuation floors. So… Are Defense Stocks Cheap? Let's define cheap. Cheap does not mean: 10x earnings Deep discount to history Cheap means: Durable backlog Government-backed revenue Margin expansion potential Not priced for unrealistic growth Most primes today trade: Mid-to-high teens multiples With 3–6% revenue growth Strong free cash flow That's not deep value. But compared to: 30x software names Cyclical industrials with less visibility They look rational. Bull / Base / Bear Bull Case Continued geopolitical tension Multi-year missile production ramp Margin expansion as supply chains normalize Upward revisions to earnings Base Case Moderate spending growth Steady but not explosive EPS growth Stocks grind higher with buybacks and dividends Bear Case De-escalation reduces urgency narrative Budget negotiations compress margins Stocks retrace after strong run Action Plan (Don't Get Cute) If you're conservative: Own one prime as ballast (RTX or LMT) Add on 8–12% pullbacks, not breakouts If you're moderate: Blend a prime + mid-tier supplier Scale 1/3 at a time If you're aggressive: Use options for defined-risk exposure into budget catalysts Avoid chasing multi-day spikes Defense is a multi-year story. But that doesn't mean you back up the truck at any price. Cheap Investor Checklist Over the next quarter, track: Backlog growth rates Missile production capacity expansion Margin commentary in earnings calls Free cash flow vs net income Buyback authorization changes NATO spending updates Pentagon supplemental budgets Book-to-bill ratios If backlog accelerates faster than valuation expansion, you have asymmetry. If valuation outruns earnings growth, patience wins. Bottom Line Defense primes are not dirt cheap. But they are durable. If government spending continues rising and missile replenishment remains a priority, earnings visibility supports current valuations. If tensions cool materially, expect multiple compression. This is a quality-at-a-reasonable-multiple setup — not a deep bargain. Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investing involves risk, including the potential loss of principal. Always do your own research before making investment decisions. 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