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Defense Portfolio Update

I wanted to give you a little update on my current defense portfolio and the planned changes.




📍Status Quo:

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📍Capability areas and benefits for the portfolio:


Air & missile defense

$RTX (+1.09%) ,$LMT (-0.16%)

Patriot, PAC-3, THAAD - core systems for the protection of cities, bases and fleets


Combat aircraft & air dominance

$LMT (-0.16%) , $BA. (+0.94%)

F-35 program (LMT), Eurofighter Typhoon, future Tempest/FCAS


Maritime strike capability

$HII (+0.43%) , $GD (+0.4%) , $BA. (+0.94%)

Nuclear submarines (Virginia, Astute), Type-26 frigates, combat systems


Sensors & electronic reconnaissance

$HAG (+0.24%) , $QQ. (-5.38%) , $CHRT (+0.28%) , $BA. (+0.94%)

AESA radars, ESM/ECM, BAE Raven ES-05 radar


Autonomous systems & drones

Almost all companies play me here. $KTOS (+4.08%) as the only drone pure play.

Unmanned jets (XQ-58) and tactical UAS - rapidly growing budget item


Cyber / AI & data fusion

$PLTR (+2.28%) ,$CACI (-0.7%)

AI-supported command and control systems (PLTR Gotham/Apollo) and US government IT services


Ground-based large-scale systems

$GD (+0.4%) ,$NOC (+0.64%) , $BA. (+0.94%)

Abrams modernizations, artillery rockets and ground-based sensors, CV90-IFV, M109 howitzers


Multidomain space flight

$NOC (+0.64%)

US nuclear deterrence - from delivery systems to warning and command and control networks




💰Realized partial sales at $HAG and $PLTR


I had already reduced $HAG and $PLTR by 50% each this year with large gains (+651% and +346%):

The valuations of both companies are currently extremely sporty.


PLTR

Trailing P/E ratio (TTM): 580 - 590x

Forward P/E ratio: ~240x

Price-to-sales: >100x


HAG

Trailing P/E ratio (TTM): 120 - 130x

Forward P/E ratio: ~80x

Price-to-sales: >5x


I will nevertheless remain invested in both positions for the time being. Mainly because I currently see no significant change in the underlying investment story.


Position sizes are relativized by new planned purchases and the concentration risk falls from 34% → 25% of the sleeve.




📊Planned adjustments:

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❓Why these changes?


New position$AVAV (-0.57%)
(drones/loitering ammunition):

Covers the fastest growing budget line (attritable UAS), which was previously barely represented.


New position $RHM (+1.49%)
(Ammunition & Platforms)

Adds the "155 mm grenades" bottleneck and European land systems to the portfolio; beneficiary of EU armament.


Increase $RTX (+1.09%)

Most favorable US prime (forward P/E ≈ 25), high visibility in air/missile defense systems.


Top-up $GD (+0.4%)

Diversified towards submarines, ground vehicles and ammunition; reliable free cash flow.




📉Planned, staggered entries:


$AVAV: $220 - $185

$RHM: €1550 - €1450

$RTX: $125 - $120

$GD: $285 - $270


🤔 What does your portfolio look like?

Which defense stocks do you hold and why?

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4 Comments

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I also find $ESLT very interesting.
Or smaller companies like $MILDEF.

I myself am also in $AVAV

But then also more with suppliers and companies that only partly cover armaments.
Such as $KIT as a drone contract manufacturer and supplier for Rheinmetall, Kongsberg, Safran etc..
Or $MTX in the consortium for the Eurofighter and maintenance company for the German Armed Forces.
Then $ERJ supplies transport aircraft for NATO countries. And smaller combat aircraft.
$PNG supplies the navy.
$TDG is also a supplier.
$IVG I also have the defense division for sale.

My new addition is $GILT. They have now also entered the defense sector.
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@Tenbagger2024 Thank you!
$GILT is particularly interesting, as it is still attractive in terms of valuation.
With $MILDEF, the growth figures and the recent setback appeal to me. I'll have to do more research on that 👍
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@BigMo
Keep me up to date.
Otherwise, $GOGO is also interesting. But I think less in the defense.
$LHX Maybe still interesting.
If you're looking in Japan, maybe $7012 is something else, it even covers robotics. But also strong in aviation.
$AVIO I also think it's great but unfortunately already too expensive.
$IDR I also still like it. But not so cheap anymore
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Nice! However, I think Palantir is just at the beginning. I've just expanded it next to Hensoldt. Let's move on!
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