Will Raytheon Be Getting New Orders?


I have to admit I'm a little surprised by the reaction to the possibility of U.S. intervention in the Syrian war. I expected it would be perceived the U.S. was going to act really upset about the situation, but nothing would actually happen.

But word began leaking out that the U.S. is dusting off some cruise missiles and putting a coat of wax on bombers. Perhaps the markets realize that picking any side in the Syrian conflict is fraught with danger and significant downsides. I doubt a cruise missile attack or aerial bombing will ‘teach Assad a lesson'. But if pilots get shot down, and Syria has the latest Russian anti-aircraft equipment, I doubt they'll be treated to house arrest in the Damascus Hyatt. Cruise missile attacks will likely kill civilians. The propaganda possibilities for Syria are endless.

In case you are curious about investment opportunities, General Dynamics (GD), which I focused on in Monday's newsletter, was the original designer of cruise missiles. However, Raytheon (RTN) is now the primary manufacturer. Cruise missiles cost from one-half to over several million dollars each, depending on what options were ordered with each one and if the U.S. bought them during a Washington's Day sale.

I talked to an elderly friend of the family last night, and she told me her retired nephew works as a security guard at Raytheon. He said the mood has been somber there, with business being cut back.

So would this mean Raytheon might be getting some business building replacements?

Past U.S. cruise missile attacks have typically involved 20 to 75 missiles, but 218 were fired at Yugoslavia, 725 at Iraq, and 159 at Libya.

The U.S. currently has about 3,500 cruise missiles in stock. So a typical attack would barely dent the inventory. However, there is a shiny new model of cruise missile coming out, with all sorts of great features (at double the cost), so they could be anxious to ‘clear the shelves'. But Raytheon's quarterly sales average $8 billion and any effect on the stock, from restocking orders at least, should be minimal.

 

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, type in www.markettamer.com/seasonal-forecaster

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2013 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

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