I like RTN, but not right now. While defense spending has been high, with an "end" to the war in Iraq, scheduled troop reductions, and indeed abnormally high defense spending I expect there to be at least some reduction to defense spending in the next 4 to 6 years. There's no clear indication this is a value buy or trade since the stock is gliding to (presumably) another of it's own bottoms.
Around $37 will be a good time to start paying more attention. At that point it's PE would be about 8 which would be a fine pick up even considering the risk of decreased defense spending. It might go as low as $25, and assuming nothing else changes it would at least be a good middle term trade (3+ months). In any event if you do pick it up having a sell trigger around $65 might not be a bad idea (just expect to hold it for a few years).
By the numbers it still looks pretty cheap and might make a decent middle performer, but you might end up paying too much if you buy it sooner rather than later simply because of the price trend. If it goes below about $38 picking up a few shares probably is a good idea, anywhere from 1/3 to 1/6 of the total allotment you'd like to have (perhaps 1% of your portfolio when you reach 6/6). If it suddenly takes a big turn after you buy you can increase your position on the cheap or simply be content with your placement since no one really needs defense exposure.
If Raytheon is always something you've wanted to/are itching to get into, buying 1/6 of your total intended position now would probably be ok. Since long term I still like it, they've got a lot of global sales and as the fight for resources and national defense continues to increase a company like Raytheon will benefit. I probably will be adding Raytheon to my portfolio just as soon as it's current price exceeds it's 20 day SMA with a positive (hand hopefully volume growth) for 2 sessions, at which point I will pick up at least 1/6 and possibly 1/3 of my total expected position.
From Reuters:
Raytheon Company, together with its subsidiaries, develops products, services and solutions in defense markets; sensing, effects, command, control, communications and intelligence (C3I), and mission support, as well as the cybersecurity and homeland security markets. The Company serves both domestic and international customers, principally as a prime contractor on a portfolio of defense and related programs for government customers. It operates in six business segments Integrated Defense Systems (IDS), Intelligence and Information Systems (IIS), Missile Systems (MS), Network Centric Systems (NCS), Space and Airborne Systems (SAS) and Technical Services (TS). In October 2009, the Company acquired BBN Technologies Corp. and related entities.
Integrated Defense Systems
IDS provides integrated solutions to an international and domestic customer base. IDS leverages its knowledge and capabilities in sensors, command, control and communication (C3), effects and mission support, to provide integrated naval, air and missile defense and civil security response solutions. Its major domestic customers include the United States Navy, Army and Air Force, and the United States Missile Defense Agency (MDA). Its major international customers include Japan, Saudi Arabia, United Arab Emirates, Taiwan, Australia, Germany, Korea and Finland. IDS’ principal product lines include Seapower Capability Systems (SCS), National and Theater Security Programs (NTSP), Patriot Programs (PP), Civil Security and Response Programs (CSRP), Global Business Operations (GBO) and Intelligence and Information Systems (IIS).
Around $37 will be a good time to start paying more attention. At that point it's PE would be about 8 which would be a fine pick up even considering the risk of decreased defense spending. It might go as low as $25, and assuming nothing else changes it would at least be a good middle term trade (3+ months). In any event if you do pick it up having a sell trigger around $65 might not be a bad idea (just expect to hold it for a few years).
By the numbers it still looks pretty cheap and might make a decent middle performer, but you might end up paying too much if you buy it sooner rather than later simply because of the price trend. If it goes below about $38 picking up a few shares probably is a good idea, anywhere from 1/3 to 1/6 of the total allotment you'd like to have (perhaps 1% of your portfolio when you reach 6/6). If it suddenly takes a big turn after you buy you can increase your position on the cheap or simply be content with your placement since no one really needs defense exposure.
If Raytheon is always something you've wanted to/are itching to get into, buying 1/6 of your total intended position now would probably be ok. Since long term I still like it, they've got a lot of global sales and as the fight for resources and national defense continues to increase a company like Raytheon will benefit. I probably will be adding Raytheon to my portfolio just as soon as it's current price exceeds it's 20 day SMA with a positive (hand hopefully volume growth) for 2 sessions, at which point I will pick up at least 1/6 and possibly 1/3 of my total expected position.
From Reuters:
Raytheon Company, together with its subsidiaries, develops products, services and solutions in defense markets; sensing, effects, command, control, communications and intelligence (C3I), and mission support, as well as the cybersecurity and homeland security markets. The Company serves both domestic and international customers, principally as a prime contractor on a portfolio of defense and related programs for government customers. It operates in six business segments Integrated Defense Systems (IDS), Intelligence and Information Systems (IIS), Missile Systems (MS), Network Centric Systems (NCS), Space and Airborne Systems (SAS) and Technical Services (TS). In October 2009, the Company acquired BBN Technologies Corp. and related entities.
Integrated Defense Systems
IDS provides integrated solutions to an international and domestic customer base. IDS leverages its knowledge and capabilities in sensors, command, control and communication (C3), effects and mission support, to provide integrated naval, air and missile defense and civil security response solutions. Its major domestic customers include the United States Navy, Army and Air Force, and the United States Missile Defense Agency (MDA). Its major international customers include Japan, Saudi Arabia, United Arab Emirates, Taiwan, Australia, Germany, Korea and Finland. IDS’ principal product lines include Seapower Capability Systems (SCS), National and Theater Security Programs (NTSP), Patriot Programs (PP), Civil Security and Response Programs (CSRP), Global Business Operations (GBO) and Intelligence and Information Systems (IIS).
Comments
Post a Comment