This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

One of the Big Four Defense Stocks Is Priced to Buy

Stocks in this article: BA NOC RTN LMT

By comparison, Boeing, which hit its 52-week high of $99.47 on Wednesday, May 22, has a P/E ratio of 18.5. Yet its price-to-earnings-to-growth (PEG) ratio (5-year expected) is slightly more than 1, which gives the impression that BA may be undervalued. Go figure!

Boeing not only has a healthy defense business, but it also has a lucrative commercial aviation business. Its 787 Dreamliner has been in the news lately due to a host of technical and mechanical issues, but United Continental (UAL), the only U.S. carrier using the plane, resumed 787 flights Monday.

The 2-hour 20-minute flight from Houston to Chicago went smoothly, with two prominent passengers riding in economy class to underscore their confidence in the plane's safety: United Continental CEO Jeff Smisek and Boeing CEO Jim McNerney.

Raytheon makes electronics and integrates mission systems. It's also the world's largest producer of guided missiles.

Think of it as the company that makes the "brains" and the operating systems for a wide variety of sophisticated surveillance, monitoring, simulation and weaponry systems that many nations rely upon. It has been in the news lately, having been awarded some lucrative government contracts.

Two big news releases from RTN's easy-to-navigate Web site bode well for the company and for investors.

Raytheon, with 2012 sales of $24 billion and 68,000 employees worldwide, received "full-rate" approval from a Defense Acquisition Board for production of RTN's Standard Missile-6 (SM-6).

This is what I'd call a big-ticket item, but the press release didn't disclose the costs of purchasing the SM-6 or how many the Defense Dept. will be purchasing.

My best guess is the government ordered hundreds of millions of dollars worth of the SM-6, and I base that on RTN's own response to the "full-rate" approval.

"SM-6 is a game-changing, transformational fleet defense missile, and we're on track to reach initial operating capability this year," said Wes Kremer, Raytheon Missile Systems' vice president of Air and Missile Defense Systems. "This is a monumental moment for the SM-6 program and signifies a new era of fleet defense for our naval warfighters."

2 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs