NEW YORK ( TheStreet) -- The Boeing ( BA), Orbital Sciences ( ORB), American Science and Engineering ( ASEI), General Dynamics ( GD) and FLIR Systems ( FLIR) received buy ratings in the range of 56%-100%. In addition, these stocks have upside potential of 8%-28%, based on consensus estimates of 12-month price targets.

The U.S. defense budget for fiscal 2012 is $553 billion, up $22 billion from 2010. The Pentagon is seeking a $78 billion cut in defense spending over the next five years. Overseas war funding could moderate, going ahead.

We have identified five defense-related stocks that could appreciate significantly over the next one year. These stocks churned an average 13% return during the past one year and are trading 11 to 21 times their estimated 2011 earnings.
5. FLIR Systems ( FLIR) designs, manufactures and markets thermal imaging systems.

Net income from continuing operations was $70.3 million for 2010 final quarter, compared with net income of $60.3 million during the same quarter a year-ago. Revenue was $434 million, up 39% from fourth quarter 2009. Operating income was $101 million, up 12% from the fourth quarter of 2009. The company closed its acquisition of ICx Technologies during the fourth quarter, and the segment contributed $46 million revenue and $2 million operating income.

FLIR derives about one-third of its revenue from the U.S. and plans to diversify its revenue sources by gaining traction in other geographies like Saudi Arabia. The stock is trading at 19 times its 2011 estimated earnings.

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