For most Americans, anxiety is the only thing that increases when global unrest makes the world look like it is on fire. But in the defense industry, global turmoil means soaring stock prices.
According to numbers from Bloomberg, Lockheed Martin Corp. (LMT) is leading the nation’s biggest defense contractors in a trend of higher-than-ever stock prices. The trend can mostly be attributed to President Barack Obama’s declaration that the U.S. will conduct open-ended airstrikes on Iraq and Syria, leading shareholders to anticipate rising sales in drones, missiles and other implements of death and destruction.
“As we ramp up our military muscle in the Mideast, there’s a sense that demand for military equipment and weaponry will likely rise,” said Jack Ablin, a defense investing expert, told Bloomberg. “To the extent we can shift away from relying on troops and rely more heavily on equipment — that could present an opportunity.”
Defense stocks are currently outpacing the broader market, as Bloomberg’s index of the four largest Pentagon contractors shows 19 percent growth for the companies this year. That’s compared to 2.2 percent growth for the Standard & Poor’s 500 index.
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