$CHRT (-1,1%) Sector: Defense / Communication / Cybersecurity

ISIN: GB00B0YD2B94

Market cap. (July 2025): ~£350m

Stock exchange: London AIM

Dividend yield: ~1.8%

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Short profile

Cohort PLC is a UK defence company providing specialist military technologies and services through six subsidiaries.

The company supplies primarily to NATO countries and focuses on:

• Electronic warfare
• Secure communications (ship, air, ground)
• Cyber security solutions
• AI-based sensor systems
• Military simulation & training systems

Cohort is not a traditional weapons manufacturer, but a system integrator and electronics specialist with a high level of expertise.

Investment Case

✅ Global armaments boom: NATO countries increase defense spending → Increased predictability for suppliers like Cohort.

✅ Record order backlog: with £615 M, almost 2 years of sales are pre-financed

✅ Strong H1 FY2025:

- Sales +25%, EBIT +69% - operational strength already visible in the current year.

✅ Modern defense technologies: Focus on communication, AI & cyber security - strong demand, scalable.

✅ Solid balance sheet: acquisition (EM Solutions) was paid for from cash, debt ratio remains low.

✅ Moderate valuation:

• P/E ratio 2025e ~14
• EV/EBIT ~13
• Dividend yield: ~1.8%, rising

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Risks

• Strong dependence on government contracts
• Delays in approvals/tenders possible
• Limited liquidity (small cap, low trading volume)

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Conclusion

Cohort PLC is a defensive growth stock from the defense sector with strong niche positioning.

Ideal for investors who are looking for:

• Predictability,
• cash flows,
• and technology-driven growth - without the volatility of traditional defense stocks.

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

📍Status Quo:

📍Capability areas and benefits for the portfolio:

Air & missile defense

$RTX (-0,02%) ,$LMT (+0,33%)

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

Combat aircraft & air dominance

$LMT (+0,33%) , $BA. (+0,19%)

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

Maritime strike capability

$HII (+0,56%) , $GD (-0,49%) , $BA. (+0,19%)

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

Sensors & electronic reconnaissance

$HAG (-0,66%) , $QQ. (-0,34%) , $CHRT (-1,1%) , $BA. (+0,19%)

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

Autonomous systems & drones

Almost all companies play me here. $KTOS (+0,01%) as the only drone pure play.

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

Cyber / AI & data fusion

$PLTR (+0,11%) ,$CACI (+0,02%)

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

Ground-based large-scale systems

$GD (-0,49%) ,$NOC (+0,1%) , $BA. (+0,19%)

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

Multidomain space flight

$NOC (+0,1%)

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:

❓Why these changes?

New position$AVAV (-0,02%)
(drones/loitering ammunition):

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

New position $RHM (+0,11%)
(Ammunition & Platforms)

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

Increase $RTX (-0,02%)

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

Top-up $GD (-0,49%)

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?