Why Lockheed Martin (LMT) Might Be a Smart Investment Right Now

[aventador]

@jackwallar1000 Of course it would. But generally curious. Didn’t seem like Ford was nationalized during WW2.

 

[pastorblessing]

@redletters Not to mention LMT already had its big jump when the Israel-Hamas conflict reignited. I feel like the current conflicts are priced-in at the moment and as they (hopefully) unwind over the next few years, LMT could remain pretty flat.

 

[neowatchman]

@redletters I mean LMT has been good to me since I have had it over 20 years...It is a stock I am not looking to dump any time soon.

 

[biehle]

@redletters This is a fallacy though. All you need is a steady rate of return. Compounding occurs mainly on your side: reinvesting your returns back into the stock naturally leads to a compounding effect. Hence why a high-dividend stock that stays flat may perform better than a low-dividend stock that reinvests into itself, even over the long run.

 

[resjudicata]

@redletters Also, the future belongs to mass production of cheap defence goods. Drone swarms. Lethal autonomous weapon systems.

Some spacex-looking company is gonna eat oldschool MIC as soon as real conflict breaks out.

 

[marylandmama]

@resjudicata A big reason defense contractors don’t act as “disruptively” as other sectors (specifically tech) is because their customer (the DoD) does jot want that. The DoD approaches companies with a problem set and says to them “show us how you can solve it and how much it will cost” (aka RFQ). Then the DoD picks the “best” proposal.

An example of a disruptive company trying to enter the market is Blue Origin (Bezos version of SpaceX). They were very innovative, disruptive, nimble, etc and as they have steered toward more government contracts their processes, business rhythms, and time-reporting (billing) have gotten more like traditional contractors. It’s because the customer requires it in their contracts.

Some companies have formed that take a different approach. These companies privately fund R&D and production for potential DoD products and then their plan is to approach the DoD to sell them. I don’t think the DoD has done much (or even any) business with these companies yet.

 

[micmic0929]

@marylandmama Don't a lot of defense contracts often get subcontracted to their competitors? That's what I recall from conversations I had with friends that worked at a major defense company. They mentioned, sure, the big contract was the prize, but there were smaller wins possible later in a certain project. I imagine the number of companies involved to produce a lot of these products reduces timely innovation.

 

[savvy41716]

@micmic0929 Depends on the needs of the contract. If a major company has the chops to meet 65% of the requirements, they may be the prime contractor, then partner with other companies to fulfill the remaining 35%.

Compare it to a general contractor working on a house - they're in charge of overseeing the job, but may subcontract out to other companies to do drywall, painting, siding, etc. Same concept.

There's also the possibility the feds have certain hiring reqs in place, e.g. a certain percentage of small businesses, etc.

 

[beachsidebob]

@marylandmama Palantir and Anduril are companies that did their own R&D, though I’m not sure either is profitable.

 

[diannemc1957]

@resjudicata Check out what the dude that created the oculus rift is up to now. I don’t think his company is public yet but I think it’s right along the lines of what you’re talking about.

 

[resjudicata]

@diannemc1957 It’s not bad, but it’s still $200k per rocket.

Ukraine is building drones out of off the shelf Chinese parts. They should be getting them from us.

 

[goodmore]

@redletters You raise valid points about the growth potential of defense stocks, their revenue is closely tied to government defense budgets, which typically grow in alignment with GDP rather than exceeding market growth rates.

I just think LMT now is particularly timely due to increased defense spending amidst the ongoing wars and significant contract wins. They could lead to some decent gains. For example, check out how Boeing is doing, I think LMT might follow suit once they sort things out with Howmet Aerospace.

 

[jpserino]

@goodmore Wtf is this an AI?

 

[goodmore]

@jpserino What lol I genuinely think it’s a good investment, I just wanted to hear people’s opinions

 

[simonbarkoziba]

@goodmore The way you worded your previous reply sounds exactly like an AI.

 

[taii3]

@simonbarkoziba ChatGPT learned to talk the way it does from somewhere. OP just has the sort of tone that's common on the internet that ChatGPT picked up on.

 

[goodmore]

@simonbarkoziba My response was legitimate though lmao.. I thought it’s particularly a good time to invest, because of the recent news I read about contracts awarded to LMT and the recent increase in government spendings, amidst the ongoing wars. However, I’ve now read in other comments that the contracts awarded to LMT weren’t actually as significant as I thought. And, in my reply, I also validated the previous commentor’s point about growth being more tied to GDP than market growth rates. And, I was actually confused by Boeing’s performance versus LMT’s.. So that’s basically what I wrote

 

[simonbarkoziba]

@goodmore Very valid, even though I also disagree with the conclusion. Lockheed is a safe investment, but not a highly profitable one. I'd rather throw money at an index fund. I invested in Boeing myself because they were down already and they only had to recover to normal operations to make the stock price shoot up many times. I still think Boeing has enough steam to go to 300 over the next year. General Dynamics is my other pick.

 

[goodmore]

@simonbarkoziba Like this?

In the realm of markets, a giant stands tall,
LMT, its name, echoing a strong call.
A bastion of defense, in the sky and the sea,
Crafting might and security, a financial key.

From the earth to the stars, its reach unfurls,
Crafting wings and gears, a dance of whirling twirls.
Investors watch with keen, eagle eyes,
As portfolios rise, beneath the open skies.

In boardrooms and on charts, the story's told,
Of a company bold, in a world unfold.
Its stocks, a dance of numbers and dreams,
Reflecting a world more complex than it seems.

Yet amidst the sheen of metal and might,
Lies a question of ethics, in the silent night.
For where money flows, so does consequence,
In the intricate dance of finance and defense.

So ponder well, ye who seek to invest,
In the tale of LMT, and its ongoing quest.
For in each dollar placed, and each share bought,
Lies a part of our world, and a thought for thought.

 

[simonbarkoziba]

@goodmore The other one starting with "You raise valid points" sounded more computer scripted. Go on wallstreetbets and check their AI VisualMod in the comments of all their posts.